Chip Stocks Sink as U.S. Tightens Export Controls to China

Key Highlights:

Semiconductor stocks tumbled Wednesday after Nvidia and AMD warned of financial impacts due to new U.S. export rules targeting chip sales to China.
Nvidia (NVDA) and AMD (AMD) each dropped over 6% in early trading, while Broadcom (AVGO) fell nearly 4%, dragging the PHLX Semiconductor Index (SOX) down 4%.
The Trump administration has mandated export licenses for AI chips, including Nvidia’s H20 and AMD’s MI308, restricting their sale to Chinese firms.
Nvidia said it now requires a license to sell its H20 chip “for the indefinite future,” citing concerns about the chips being used in Chinese supercomputers.
The company expects a $5.5 billion charge in Q1 FY2026 and is set to report earnings on May 28.
AMD anticipates up to $800 million in charges tied to the MI308 chip due to the new licensing rules.
The U.S. Commerce Department confirmed that similar licensing will apply to other comparable AI chips.

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