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U.S. Curbs Chip Exports to China. Nvidia Stock Falls.

U.S. Curbs Chip  Exports to China. Nvidia Stock Falls.


Nvidia

stock was falling Tuesday after the Biden administration said it would be tightening its restriction on exports of artificial intelligence chips to China.

A

Nvidia

spokesperson told Barron’s that given the demand worldwide for the chip maker’s products, the company doesn’t expect a meaningful impact on its near-term financial results. 

The Commerce Department announced Tuesday that it would be further restricting exports of AI chips, making it more difficult for companies like

Nvidia

(ticker: NVDA) to sell their products to China.

President Joe Biden last year unveiled restrictions on semiconductor exports to China in an attempt to slow the country’s technological advances and keep most of the chip industry in the U.S. The new rules announced Tuesday update those measures announced last year.

The new rules impose controls on additional types of semiconductor equipment, further ensure U.S. companies can’t provide support to advanced Chinese semiconductor manufacturing, and expand license requirements for chip- manufacturing equipment to apply to 21 additional countries beyond China and Macau, for which the U.S. maintains an arms embargo.

“These controls maintain our clear focus on military applications and confront the threats to our national security posed by the PRC Government’s military-civil fusion strategy,” said Secretary of Commerce Gina Raimondo in a news release Tuesday. “As we implement these restrictions, we will keep working to protect our national security by restricting access to critical technologies, vigilantly enforcing our rules, while minimizing any unintended impact on trade flows.”

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Nvidia shares were falling 5% to $438.15. The stock was the worst performer in the


S&P 500

and


Nasdaq 100

on Tuesday.

The Nvidia spokesperson told Barron’s that the chip maker complies “with all applicable regulations while working to provide products that support thousands of applications across many different industries.”

The Semiconductor Industry Association said in a news release Tuesday that it was evaluating the impact of the updated export controls to the industry, but urged the administration to strengthen coordination with allies “to ensure a level playing field for all companies.”

“We recognize the need to protect national security and believe maintaining a healthy U.S. semiconductor industry is an essential component to achieving that goal,” the

SIA

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said. “Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.”

Shares of Nvidia’s semiconductor peers also fell Tuesday.

Advanced Micro Devices

stock (AMD) slipped 1%,

Broadcom

(AVGO) declined 2.4%,

Qualcomm

(QCOM) ticked 0.6% lower, and

Intel

(INTC) was off 2.1%.

Write to Angela Palumbo at angela.palumbo@dowjones.com



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