US chip makers hit by new China export rule

Concerns over new US limitations on the selling of artificial intelligence processors to China have caused shares of major chipmakers Nvidia and AMD to decline.

To address the possibility of chips being "used in, or diverted to a'military end use'... in China and Russia," according to Nvidia, the US government needs a new licence, starting immediately.

There are worries that the rule will result in millions of dollars in revenue being lost. Both chip manufacturers' shares decreased in New York's after-hours trade. Shares of AMD fell 3.7% while those of Nvidia fell 6.6%.

For Nvidia, the new limitations represent a "gut punch," according to Dan Ives of Wedbush Securities, who spoke to the BBC. According to a statement to the BBC, the US Commerce Department is "not in a position to specify particular policy adjustments at this time."

A representative for the Commerce Department stated, "We are taking a holistic approach to implement additional policies necessary linked to technology, end-uses, and end-users to defend US national security and foreign policy interests.

Nvidia continued, "If customers do not wish to acquire the company's alternative product offerings or if the (US government) does not provide licences in a timely manner or denies licences to significant customers," around $400 million (£345.2 million) in sales to China might be impacted.

A representative for AMD stated that the regulations, which forbid the export of its MI250 chips to China, were not anticipated to have "a major impact" on business.

According to analysts, China may find it more challenging to purchase chips for advanced computing as a result of US restrictions. It might also have an impact on the profits of US manufacturers like Nvidia and AMD, according to Mario Morales, a market research analyst located in California.

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