Trump's Trade Policies Shake Global Chip Market: Nvidia, AMD Take Hit

The global semiconductor market faces turbulence as U.S. President Donald Trump's trade policies lead to export restrictions. Key players like Nvidia and AMD experience significant financial hits, sparking a stock selloff. Despite challenges, chip demand remains strong due to ongoing sales to major cloud companies.

Global semiconductor stocks faced significant declines on Wednesday due to U.S. President Donald Trump's fluctuating trade policies affecting future projections for industry giants like Nvidia and AMD. Attempts to reshape international trade with tariffs and export restrictions are impacting Nvidia, which warned of a $5.5 billion loss following limitations on AI processor exports to China, and ASML, which raised concerns over its outlook.

The recent U.S. export restrictions affected AMD's MI308 processor, marking a major setback for the AI chip sector that has seen declining momentum following a two-year boom, as trade threats and Big Tech's spending concerns influence market sentiment. Nvidia shares ended the day down nearly 7%, erasing over $148 billion in market value, while AMD dropped 5.8% with an $800 million loss forecast due to the restrictions. Other AI-focused chip stocks, including Arm, Broadcom, and Micron, plummeted between 2.5% and 4.6%.

Nvidia clarified on Wednesday that it complies with U.S. government guidelines on chip sales and distribution after the Commerce Department announced new export licensing necessities for its H20 chips. The evolving U.S. export constraints have increasingly restricted American chipmakers' access to the Chinese market, yet it's still a key revenue stream. Nvidia derived over $17 billion, approximately 13% of last year's sales, from China; AMD's China revenue accounted for more than 24% of its total. Analysts highlight the geopolitical unpredictability's impact on the tech market, as evidenced by the market's selloff in response to U.S. policy adjustments.

(With inputs from agencies.)