When the U.S. weighed on its efforts to restrict China from A.I. semiconductors, markets yawned. Nvidia (NVDA) and AMD (AMD) both shrugged at the export restriction. This dismissal may prove risky. The Biden administration will have an impact on their chip sales.
Markets are not worried. In the last round of restrictions, Nvidia modified its H100 chip to meet export control rules. It had built a lower-specification chip for the Chinese market. This time, the new controls would restrict Nvidia’s A800. Be cautious with NVDA stock.
Dutch firm ASML (ASML) announced on Friday, June 30, 2023, that it would curb exports to China. Citing national security grounds, the Dutch minister will enforce the restrictions on ASML starting on Sept. 1. ASML stock is unlikely to plunge. It is well diversified, so its reliance on China markets is minimal.
In the memory sector, Micron (MU) is struggling regardless of the restrictions. It posted a loss of $1.43 a share as revenue slumped by 56.6% Y/Y to $3.75 billion. Markets will realize that the export restriction will hurt other firms indirectly. Micron is already struggling from the cyclical downturn in the chip sector. The new curbs only worsen its path to recovery.
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