Biden targets China with new chip restrictions, NVIDIA slides – NVIDIA (NASDAQ:NVDA), Taiwan Semiconductor (NYSE:TSM)

On Monday, the outgoing Biden administration plans to carry out its third crackdown on China’s semiconductor industry within three years, citing the same national security threats it cited as reasons for previous sanctions, and citing geopolitical tensions between the two countries. This is heightening academic tension.

The initiative, which begins Monday, will impose export restrictions on 140 Chinese companies, including chip equipment makers such as Nowra Technology Group, targeting advanced memory chips and chip-making tools.

Nvidia Inc. NVDA Stock prices are falling on Monday. Previous reports indicated that Nvidia could earn $12 billion in revenue from 1 million H20 GPUs in China in 2024.

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The restrictions will also affect Chinese chip tool makers Pyotek and Cicaria Technology, as well as shipments from countries such as Singapore and Malaysia, Reuters reported.

This package includes 24 additional chip manufacturing tools, software, and new controls for high-bandwidth memory chips that are essential for AI training and high-end applications.

Lam Research Corporation LRCXKLA Corporation KLACand Applied Materials, Inc. Amat could face significant repercussions along with non-U.S. companies such as Netherlands-based ASM International ASML. These regulations are part of a broader strategy to limit the Chinese government’s access to advanced technologies critical to the semiconductor sector.

According to previous reports, the United States has proposed a moderate response to China with its third semiconductor embargo after intense negotiations with allies such as Japan and the Netherlands, as well as U.S. semiconductor manufacturing equipment manufacturers. was.

The Chinese companies added to the list include more than 100 semiconductor and chip-making tool makers, two investment firms and others associated with telecommunications giant Huawei, a keystone of China’s chip advancement. Included.

Companies on the list require special licenses to receive shipments from U.S. suppliers, but most license requests are likely to be denied.

The new rules also expand foreign direct product rules, restricting exports from manufacturers in the United States, Japan and the Netherlands to essential chip factories in China.

As per the agreement with the US, Japan and the Netherlands are exempt, which reassures ASML Holding NV. ASML Tokyo Electron Ltd. tory.

However, manufacturers in other countries such as Israel, South Korea, and Taiwan are also affected, much to the chagrin of Taiwan Semiconductor Manufacturing Company. TSM and samsung electronics SSNLF.

Investors can gain exposure to semiconductor stocks through the Invesco Semiconductors ETF PSI SPDR S&P Semiconductor ETF XSD.

Price Action: At last check on Monday, NVDA stock was down 0.53% in pre-market trading at $137.52. LRCX fell 0.31% and AMAT fell 0.32%. ASML rose 0.32% and TSM rose 2.32%.

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