new us export controls shake tsmc and nvidia stocks

2025-01-15 general

United States, Wednesday, 15 January 2025.
The Biden administration’s recent announcement of stringent export controls on AI chips has sent ripples through the semiconductor industry. Key players like TSMC and NVIDIA have seen their stock valuations take a hit. NVIDIA’s shares dropped by 15%, a reflection of investor concerns over the new rules. The restrictions aim to limit advanced technology exports to most countries, with the goal of slowing China’s AI progress. This move has sparked accusations from China of the U.S. using technology as a weapon. The industry, including NVIDIA, warns that these controls might backfire, boosting China’s chip capabilities instead. As the policy undergoes a 120-day review, there is anticipation about how the incoming Trump administration might adjust or uphold these measures. The global semiconductor market braces for further volatility as companies adapt to this shifting regulatory landscape.

Market impact and immediate reactions

The announcement of tighter AI chip export controls on January 12, 2025, triggered significant market movements [1]. NVIDIA experienced a sharp 15 percent decline in stock value [2]. The new regulations restrict GPU sales globally, with most countries limited to importing no more than 1,700 high-end GPUs annually without U.S. government approval [1]. TSMC, a key semiconductor manufacturer, also saw its stock valuation decline due to concerns over production capabilities under the new U.S. regulations [2].

Industry pushback and concerns

Major industry players have voiced strong opposition to the measures. NVIDIA’s vice president Ned Finkel warned that the policy could harm American economic interests and benefit competitors [4]. The U.S. Semiconductor Industry Association issued a warning on January 6, criticizing the Biden administration for implementing such significant policy changes without meaningful industry consultation [4]. These restrictions particularly affect data center configurations for AI model training [7].

Global implications and tiered system

The U.S. has established a three-tier system for chip access [7]. Close allies like Taiwan and Japan receive unrestricted access, while intermediate countries face quotas [1]. China faces the strictest limitations [7]. The European Union expressed concerns about the measures, emphasizing that restricted access to advanced AI chips could harm U.S.-EU economic cooperation [5][6]. The policy includes a 120-day comment period, allowing the incoming Trump administration to review the measures [1].

Bronnen

Export controls Stock valuation