Chip Stocks Fall As U.S. Moves To Further Restrict China Exports

Leading semiconductor stocks such as (NVDA) and Broadcom (AVGO) are down on reports the U.S. government may further restrict the export of microchips and semiconductors to China.

Specifically, the U.S. Commerce Department is considering terminating waivers that allow some chipmakers to send American technology to factories in China.

The new restrictions reportedly include Taiwan Semiconductor Manufacturing Co. (TSM) that is based in the Chinese territory of Taiwan and manufactures about two-thirds of the world’s microchips.

The latest move by the U.S. government comes as America and China hold a loose agreement on tariffs and an uneasy truce in their ongoing trade battle.

Controls around microchips and semiconductors reportedly remain a major sticking point between the two countries.

The U.S. has issued several chip export changes this year under the administration of U.S. President Donald Trump.

China has called the U.S. rule changes “discriminatory” and retaliated by restricting some critical metals and rare earth minerals.

For U.S. chipmakers such as Nvidia and Broadcom, these would be the latest government curbs that could impact their global sales.

Such restrictions would limit the companies’ ability to sell advanced artificial intelligence (A.I.) chips into China due to national security concerns.

During its most recent earnings report, Nvidia said current export restrictions on its China-bound microchips cost the company about $8 billion U.S. in lost sales.

NVDA stock has gained 4% this year to trade at $143.85 U.S. per share.