Nvidia Faces Setback as China's Access to Advanced Chips is Severed

The Biden administration has announced new restrictions on the export of advanced chips to China, which will impact chip stocks in the US. These measures are intended to close loopholes that were identified after export restrictions were implemented on chips last October. The goal is to prevent China's military from importing advanced semiconductors. Nvidia, a leading chip manufacturer, has stated that these new restrictions will prohibit the sale of two high-end artificial intelligence chips and one gaming chip that were specifically designed for the Chinese market. The Semiconductor Industry Association, representing the majority of the US semiconductor industry, believes that the measures are too broad and could harm the US semiconductor ecosystem without enhancing national security. The Chinese embassy has expressed strong opposition to these restrictions, which also target Iran and Russia. In response to China's previous export restrictions, the US, Japan, and the Netherlands have already imposed chip technology export restrictions on China. This ongoing trade dispute between the two largest global economies has raised concerns about "resource nationalism," whereby governments hoard critical materials to exert influence over other nations.