Global Chip Stocks Recoil Amidst Trade Policy Uncertainties

Global chip stocks plummeted after new U.S. trade policies affected semiconductor exports, substantially impacting Nvidia. Tariffs against China have led to significant financial hits for Nvidia and other semiconductor companies. Despite the slump, chip demand from cloud computing remains strong.

On Wednesday, global chip stocks took a significant hit following the latest developments in U.S. trade policy under President Donald Trump. The policy changes have clouded prospects for semiconductor companies, notably AI leader Nvidia.

Efforts to restructure global trade through tariffs and export restrictions are taking a toll. Nvidia cautioned it might face a $5.5 billion setback after the U.S. restricted exports of its AI processors to China. Meanwhile, ASML, a Dutch company that manufactures chip-making tools, also expressed concerns over its financial outlook. These restrictions affected not only Nvidia but also Advanced Micro Devices' MI308 processor, delivering another blow to the AI chip industry.

Nvidia shares fell 6.3% in U.S. premarket trading, with a potential market value loss exceeding $160 billion. AMD similarly warned of an $800 million impact due to the export curb. Other AI-related semiconductor stocks, such as Arm, Broadcom, Marvell Technology, and Micron, also experienced declines.

(With inputs from agencies.)