Nvidia and AMD Shares Plummet over US Curbs on AI Chip Exports to China

TMTPOST-- Shares of two American artificial intelligence (AI) chip makers plummeted on Wednesday over new U.S. export controls on China.

Credit：Freepik

Shares of Nvidia Corporation and American Advanced Micro Devices (AMD) both sank 10.5% at midday before settling nearly 7% and 6.4% lower on Wednesday. Nvidia and other tech stocks led a selloff that day, driving the PHLX Semiconductor Index (SOX), a Philadelphia Stock Exchange capitalization-weighted index composed of the 30 largest U.S. companies primarily involved in the design, distribution, manufacture, and sale of semiconductors, 4.1% lower as of close.

The selloff highlighted mounting concerns over the Trump administration’s further high-tech export controls on China, a key market for the semiconductor industry. Nvidia and AMD disclosed late Tuesday their possible costs resulted from the new U.S. license control requirement.

Nvidia said in a filling that it was informed by the U.S. government on April 9, last Wednesday,that the government requires a license for export to China, including its two special administrative regions Hong Kong and Macau, of the company’s “H20 integrated circuits and any other circuits achieving the H20's memory bandwidth, interconnect bandwidth, or combination thereof.”

The U.S. government indicated the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China, according to the filling. It added that the government on Monday informed Nvidia the licence requirement will be in effect for the indefinite future.

Nvidia in the filling thus estimated its first quarter of fiscal year 2026 ending on April 27 will see about $5.5 billion of charges regarding H20 products associated with H20 products for inventory, purchase commitments, and related reserves.

H20, which is modified to have lower performance than other Nvidia chips, is the most advanced AI chips that Nvidia can export to China under the current export rules. Many in the semiconductor industry had feared the H20 chip would be one of new targets of the U.S. government because it is one of the chips that Chinese AI upstart DeepSeek used to train its popular reasoning AI model R1.

In a filling with the U.S. Securities and Exchange Commission (SEC), AMD said it on Tuesday completed its initial assessment of a new license requirement implemented by the United States government for the export of certain semiconductor products to China, including Hong Kong and Macau. The new export control applies to AMD’s MI308 products, and the company is expected to apply for licenses under the restrictions, though “there is no assurance that licenses will be granted,” AMD wrote.

AMD expected the failure to obtain the export license of MI308 products would incur charges of up to $800 million in inventory, purchase commitments and related reserves, according to the filling. AMD website shows AMD Instinct MI300 Series accelerators are “uniquely well-suited to power even the most demanding AI and HPC workloads.”

The new export control also hit Intel Corporation, according to a Financial Times report on Wednesday. The American chipmaker has reportedly informed Chinese customers a license will be required if they want to order advanced AI processors since Intel’s Gaudi series and Nvidia’s H20 far exceed the latest requirements of export control rule.

Intel chips would require a license for exporting to China if they have a total DRam bandwidth of 1,400 gigabytes (GB) per second or more, input-output (I/O) bandwidth of 1,100 GB per second or more, or a total of both of 1,700 GB per second or more, according to the report.