Trade War Triggers Multibillion Dollar Semiconductor Charges At Nvidia AMD and ASML

Three of the world’s largest semiconductor manufacturers have disclosed substantial financial impacts resulting from the intensifying trade conflict with China. Nvidia, the US chipmaker, projects a £5.5 billion charge due to fresh restrictions on chip exports imposed by the US government, aimed at preventing Chinese advancement in artificial intelligence technology.

Advanced Micro Devices revealed on Wednesday an anticipated £800 million impact following the US government’s new limitations on semiconductor sales to China. ASML, the Dutch-based global leader in computer chip-making equipment manufacturing, issued warnings about US tariffs creating uncertainty in their 2025 and 2026 outlook.

The US administration’s clampdown on powerful AI chip exports to China stems from concerns regarding their potential military applications and AI breakthroughs. This regulatory tightening marks a significant escalation in Washington-Beijing tensions, building upon previous restrictions implemented during President Biden’s term.

The Commerce Department’s new licensing requirements affect several key products, including Nvidia’s H20 chip – their most advanced offering available in China – and AMD’s MI308. These chips, while less powerful than Nvidia’s flagship Blackwell model, remain crucial for AI model inference processes.

Chinese tech giants ByteDance, Alibaba Group and Tencent Holdings reportedly placed orders exceeding £16 billion for Nvidia’s H20 chips in 2025’s first quarter. This surge in demand appears linked to Chinese start-up Deepseek’s AI models, which have raised US concerns by offering ChatGPT-comparable capabilities at significantly lower costs.

The market response was immediate and severe, with Nvidia shares declining 6.7 per cent, AMD dropping 7.4 per cent, and ASML falling 7.1 per cent. The semiconductor sector now faces unprecedented challenges as these new trade restrictions threaten to reshape global supply chains and market dynamics.