Semiconductor stocks get slammed as Biden restricts sales to “countries of concern” like China
The VanEck Semiconductor ETF has swung from the top of a three-month range to the bottom in one week.
Chip stocks are getting pummeled as the Biden administration unveiled a new framework for semiconductor exports — its AI Diffusion rule — that restricts the ability of China and other “countries of concern” to access the powerful, sought-after devices.
The White House said the measures are “continuing to ensure that advanced semiconductors sold abroad are not used by countries of concern to train advanced AI systems.”
Nvidia and AMD each took a leg lower after hours on January 8 after reports of these export curbs surfaced, and ended down 3% and 4.8% on Friday when markets reopened after a national day of mourning for former President Jimmy Carter.
The sell-off continues: these companies, along with Taiwan Semiconductor, Broadcom, Intel, Qualcomm, and Micron, are all off at least 1% on Monday morning in response to the confirmation of these reports.
Ned Finkle, vice president of government affairs at Nvidia, blasted the Biden admin’s decision, drawing an unfavorable comparison with its predecessor’s approach.
“The first Trump Administration laid the foundation for America’s current strength and success in AI, fostering an environment where U.S. industry could compete and win on merit without compromising national security,” he said.
“In its last days in office, the Biden Administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review.”
The continued pain in the premarket chipmakers has dragged the VanEck Semiconductor ETF as much as 2.5% lower. The ETF is now trading near its 200-day moving average, a level it has closed below just twice over the past year, and near the bottom of the $240 to $260 range that’s persisted for months.
