On Wednesday, April 16, technology stocks are on a downward trajectory as new restrictions from the United States government on the export of Nvidia Corp. chips to China and the disappointing report from ASML Holding NV have significantly worsened the prospects for the semiconductor sector, which has already caused the market value of the two companies to drop by $155 billion.
On the US premarket trading value of Nvidia’s shares fell by as much as 7.1%. This drop in the indicator was recorded after the chip developer warned that in the first fiscal quarter, it would report about $5.5 billion in writedowns tied to inventory and commitments for the microcircuit. Against this background, Nasdaq 100 futures fell by 1.3%.
The value of shares of the Dutch manufacturer of equipment for making chips ASML decreased by as much as 7.6%.
It is worth noting that the selloff in semiconductor stocks has already wiped out about $2 trillion in market capitalization over the past three months.
The administration of United States President Donald Trump has barred Nvidia from selling its H20 chip in China. This decision was the next stage of the technological confrontation between Beijing and Washington. According to media reports, the new measure by the Donald Trump administration will complicate the manufacture of products belonging to a line clearly designed to comply with previous US curbs.
On Monday, April 14, the United States government informed Nvidia that a license for the indefinite future would be required to export the H20 to China.
Since the beginning of the current year, the value of the chip developer’s shares has fallen by 16%. In 2024, this indicator increased by more than 200%.
It is worth mentioning that the United States’ first time barred Nvidia and other artificial intelligence chipmakers from selling their most advanced products to China in October 2022. This decision was made amid Washington’s concerns that Beijing could use the mentioned products to strengthen its military capabilities. Since then, export control measures have expanded significantly to include, among other things, semiconductor manufacturing equipment and a range of both processors and high-bandwidth memory chips. These products are critically needed for the development of artificial intelligence apps.
Nvidia developed the H20 chip in response to the restrictive measures of 2023, which made it impossible to ship to China another H800 processor, aimed at the Asian market and presented after the first US curbs. The H20 microcircuit is less powerful and has a lower level of performance than the company’s top-of-the-line chips designed to train artificial intelligence intelligence models. At the same time, this microcircuit can still be used for the mentioned tasks and running AI software and services. The H20 chip is well-suited to the inference stage. In this case, it refers to the process in which artificial intelligence models recognize patterns and draw conclusions.
According to preliminary media estimates, Nvidia’s writedown means that the company could miss out on about $15 billion in annual revenue.
ASML reported orders for the first quarter of 2025, which turned out to be almost 1 billion euros less than preliminary expectations. The company, which largest customers are Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel Corp., reported bookings worth 3.94 billion euros ($4.47 billion). Analysts interviewed by the media expected the mentioned figure to be 4.82 billion euros.
ASML is one of the beneficiaries of the so-called artificial intelligence boom. Recently, technology giants have been investing billions of dollars in chips and data centers to power the emerging technology. Against this background, ASML has projected revenue ranging from 44 billion euros to 60 billion euros in 2030. At the same time, these prospects have worsened against the backdrop of the trade war and the technological confrontation between Beijing and Washington, which will become a sensitive factor affecting the chip market.
ASML has outlined various ways the US tariffs will affect the business, including additional charges on shipments of new systems, tools, and parts. The company’s chief financial officer Roger Dassen also warned about the risk that other countries may impose tariffs on things that are being shipped from the United States into these countries. Moreover, he noted, it would be appropriate to pass on a significant part of the levies imposed on ASML to the next layer in the value chain, referring to customers who buy its chipmaking machines. The company’s extreme ultraviolet lithography or EUV machines accounted for 1.2 billion euros of net bookings in the quarter.
China accounted for 27% of ASML’s net system sales for the mentioned period. It is worth noting that the average corresponding figure for the past year was 41%.
Advanced Micro Devices (AMD) Inc. said it expects to take a charge of as much as $800 million after the Donald Trump administration put new restrictions on semiconductor exports to China. This company completed an initial assessment of a new license requirement for the export of its MI308 products. The relevant information is contained in a filing with the US Securities and Exchange Commission.
AMD has stated that it will seek licenses to export its products to China, but there is no certainty that this goal will be achieved. After the markets opened in New York, the value of the company’s shares fell by 8.1%.
The Stoxx 600 Technology Index declined by 2.2% against the background of the latest news.
The value of shares of South Korean memory chip manufacturer SK Hynix Inc. fell by 3.7%. TSMC securities slumped 2.5%. Both mentioned companies are among Nvidia’s major Asian suppliers. The value of shares of Advantest Corp., a Japanese manufacturer of equipment for the semiconductor industry, fell by 6.6%.
US-listed Chinese technology stocks were broadly lower in premarket trading. The value of shares of Alibaba Group Holding Ltd. decreased by 2.2%. Baidu Inc. securities fell by 1.5%.
At the same time, shares of Hua Hong Semiconductor Ltd. closed up 0.6% in Hong Kong while Advanced Micro-Fabrication Equipment Inc. securities increased 2.5% in Shanghai. These are Chinese hardware stocks.
Restrictions from the United States are narrowing China’s space of opportunity in terms of access to advanced chips. At the same time, the Asian country is striving to develop the domestic manufacturing sector in a high-tech context. So far, this is only a goal, not a reality. The need for technological sovereignty for the Asian country is becoming increasingly apparent amid the ongoing escalation of tensions between Beijing and Washington.
As we have reported earlier, Nvidia Plans to Manufacture Some AI Chips in US.
