On Semiconductor Giants Navigating US-China Trade Tensions
Last week, NVIDIA Corp., in a filing with the U.S. Securities and Exchange Commission, said that on April 9, 2025, the U.S. government announced it requires export licenses for NVIDIA's H20 chips and similar circuits to China (including Hong Kong and Macau) and D:5 countries, citing risks of diversion to Chinese supercomputers. On April 14, the government confirmed this requirement will remain in effect indefinitely. As a result, the Company’s first quarter of fiscal year 2026 ends on April 27, 2025 … “are expected to include up to approximately $5.5 billion of charges associated with H20 products for inventory, purchase commitments, and related reserves.”
NOTE: The Santa Clara, CA based company had TTM revenue of about $130 billion.
Similarly, Advanced Micro Devices, Inc. in an SEC filing said it "completed its initial assessment of a new license requirement implemented by the United States government for the export of certain semiconductor products to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent in such countries (the “Export Control”). The Export Control applies to the Company’s MI308 products … the Company expects that the Export Control may result in charges of up to approximately $800 million in inventory, purchase commitments and related reserves.
Note: The Santa Clara, CA based company had TTM revenue of about $23 billion.
Separately, ASML CEO Christophe Fouquet said “the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while ... artificial intelligence continues to be the primary growth driver in our industry. It has created a shift in the market dynamics that benefits some customers more than others, contributing to both upside potential and downside risks as reflected in our 2025 revenue range.”
Note: The Netherlands based company had FY2024 revenue of about $29 billion as a producer of semiconductor manufacturing equipment.
Finally, Taiwan Semiconductor Manufacturing Company (TSMC) CEO C.C. Wei said "We certainly are mindful of the potential impact from all the recent tariff announcements, especially the impact on end market demand … Having said that, we have not seen any change in our customers' behaviour so far. So we are sticking to our forecasts”
Note: the Taiwan based company had TTM revenue of about $90 billion as a semiconductor foundry.
OUR TAKE
NVIDIA's H20 and AMD's MI308 chips were specifically designed to comply with previous U.S. export controls for China, yet now face additional licensing requirements, creating a regulatory moving target that has led to significant financial impacts.
This escalating tariff control process may drive China toward developing domestic alternatives rather than relying on downgraded U.S. technology, potentially strengthening Chinese competitors such as Huawei long-term.
While AI continues to drive semiconductor market growth as noted by both ASML and TSMC, the contrasting responses versus U.S. companies suggests geopolitical tensions are having uneven impacts across the industry based on a companies' exposure to China's substantial AI market and their position in the supply chain.