New limitations on the sale of cutting-edge semiconductors to China, including two Nvidia made-for-China processors, have been revealed by the Biden administration.
As Advanced Micro Devices and Intel were also impacted by the limits, US semiconductor stocks plummeted.
The export restrictions are intended to close gaps that were discovered when the US introduced chip export restrictions last October.
They are intended to stop China’s military from acquiring cutting-edge equipment or chips.
Two premium artificial intelligence chips—the A800 and H800—that Nvidia developed for the Chinese market will no longer be sold due to the new export limitations, according to a filing by the company. One of its gaming chips would also be disabled, according to the statement.
Other chip manufacturers are also affected by the restrictions, but experts predict that Nvidia would be most hurt because up to 25% of its data center chip sales are made in China. Following the news, Nvidia’s shares, which are regarded as a star stock, dropped as high as 4.7%.
The new regulations are “overly broad” and “risk harming the US semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere,” according to the Semiconductor Industry Association, which represents 99% of the US semiconductor industry by revenue.
The Chinese embassy’s representative said that the country “firmly opposes” the new limitations, which will take effect in 30 days and also apply to Russia and Iran.
China responded by limiting the shipments of two essential components for the semiconductor industry—gallium and germanium—two months ago.
In terms of gallium and germanium supply chains globally, China is by far the dominant player. According to the trade group Critical Raw Materials Alliance (CRMA), it generates 60% of the world’s germanium and 80% of the gallium.
The components are “minor metals,” which means that they are frequently produced as a by-product of other operations and are not typically found in nature on their own.
Along with the US, Japan and the Netherlands, which is home to important chip equipment manufacturer ASML, have also restricted China’s access to chip technology.
The ongoing back-and-forth between the two largest economies in the world has sparked worries about the growth of so-called “resource nationalism,” in which states hoard essential resources to impose power over other nations.