The chip sector melted down Friday for its third 6% one-day drop of the year after U.S. regulators moved to pump the brakes on China’s military ambitions as it issued wider restrictions on semiconductor and AI technology that can be sold to the world’s second-largest economy.
News of the ban was served fresh on the back of Advanced Micro Devices Inc. AMD, -13.87% issuing a $1 billion shortfall warning on expected sales to PC customers late Thursday. That followed last week’s revenue forecast from memory-chip maker Micron Technology Inc.’s MU, -2.93%, which was about $1 billion below Street expectations, prompting analysts to ask whether 2022’s sudden chip glut is worse than the one in 2019. AMD shares led the fall for chip stocks with a 13.9% drop to close at $58.
Friday’s drop is only the worst one-day drop on the SOX index since Sept. 13, when it dropped nearly 6.2%. In fact, Friday’s fall is merely the third worst one-day performance of the year for the SOX index with June 16’s fall of just over 6.2% ranking the worst, according to FactSet data. Nvidia shares melted down last month when the graphics processing unit maker disclosed the list of products that needed a license to sell to China, primarily the company’s A100 and H100 data-center AI technology, and estimated a potential $400 million hit in expected third-quarter revenue if licenses were denied. The ban just added to Nvidia’s bleed-out year as it has cut its outlook not just once, not just twice, but three times. Still the largest U.S.
it's not just military ambitions it's industrial ambitions, too the us wants to stop china from catching up in hi-tech bc you know what they say: if you can't beat 'em, ban 'em
I hope US regulators knows what they doing, China has money and talent to develop bans chips.