Stocks in the semiconductor sector, including Nvidia Corp, Broadcom Inc, Taiwan Semiconductor Manufacturing Co, Intel Corp, Arm Holdings, and Marvell Tech, experienced declines on Friday.
This drop was linked to a Wall Street Journal report indicating that chipmakers are planning to request an exemption from Washington to ship American technology to China, as referenced by an anonymous source familiar with the situation.
The fluctuations in stock prices highlight the intertwined nature of the semiconductor ecosystem, which encompasses various companies, material suppliers, equipment manufacturers, and related services.
Up to this point, companies like Samsung Electronics and Sk Hynix, along with Taiwanese manufacturers, have been able to send American chip manufacturing equipment to factories in China without needing additional licenses.
Jeffrey Kessler, the director of the Commerce Department, informed chipmakers of Washington’s intentions to revoke these exemptions, as detailed by the WSJ. Kessler described this measure as part of a broader effort by the Trump administration to limit the flow of vital U.S. technology to China.
Last week, President Donald Trump confirmed a trade agreement with China after two days of negotiations in London. The U.S. announced it would maintain a 55% tariff on selected Chinese imports, while China stated it would enforce a 10% tariff on U.S. products.
Prior to this, ARM CEO Rene Haas and Nvidia’s Jensen Huang criticized U.S. sanctions on China. Haas voiced concerns about the effects of restricting technology access during an event at the Founders Forum Global Conference in Oxford, highlighting how competitors in China have advanced, particularly citing Huawei Tech as an example. Huawei was blacklisted by the Trump administration in 2019 due to national security concerns.
In April, the Trump administration also imposed sanctions affecting Chinese customers and exports of data center processors, which resulted in NVIDIA generating around $8 billion in China during the second fiscal quarter.
Price Action: As of the latest data, NVDA shares were trading at $144, reflecting a decline of 1.03%. AVGO fell by 1.05%, and Arm shares decreased by 0.80%.
