Analysts warn U.S. chip export restrictions may accelerate China's semiconductor industry, potentially shifting global market dominance away from American firms.
 |
| Nvidia and AMD face major revenue hits amid new U.S. chip export rules, as analysts warn the move may help China close the technology gap faster than expected. Image: CH |
SAN FRANCISCO, USA — April 20, 2025:
Tighter U.S. restrictions on semiconductor exports to China may have unintended consequences, as experts warn the move could accelerate China’s technological progress and challenge American leadership in the global chip market.
“What’s actually happening is that the U.S. government is handing China a major win,” said Jack Gold, principal analyst at J. Gold Associates. “Once China’s chip industry becomes globally competitive, U.S. companies may find it nearly impossible to win back lost market share.”
Major U.S. chipmakers are already bracing for the fallout. Nvidia and AMD, two of the country's leading semiconductor firms, have notified the U.S. Securities and Exchange Commission of substantial expected losses due to the updated export rules. Nvidia estimates a hit of up to $5.5 billion, while AMD forecasts a potential loss of $800 million.
The new regulations require companies to obtain licenses to export advanced chips like Nvidia’s H20 and AMD’s MI308 to China. These processors—built for high-performance computing and artificial intelligence—were designed to comply with previous export standards but are now restricted due to national security concerns.
“Nvidia essentially designed the H20 for China, maximizing performance within the bounds of existing rules,” Gold explained. “Now that product is effectively blocked.”
Independent analyst Rob Enderle warned that China, led by tech giant Huawei, will use this opportunity to double down on domestic semiconductor development.
“This is going to be a godsend for China,” Enderle said. “They’ll fast-track their microprocessor industry and become serious global competitors.”
Analysts argue that the broader geopolitical strategy could be counterproductive, potentially pushing traditional U.S. allies toward alternative sources, including Chinese-made chips.
“Trump thinks he can bully nations into submission,” Gold added. “But global trade doesn’t work that way. These policies may push even friendly countries to consider Chinese alternatives.”
Despite the looming challenges, Nvidia CEO Jensen Huang expressed optimism, saying the company will continue driving AI innovation while complying with evolving regulations.
Wedbush analyst Dan Ives highlighted Nvidia’s central role in the global tech landscape: “The Trump administration knows Nvidia is at the heart of the AI revolution,” he said. “Blocking China from access is a strategic move—but it may trigger unintended consequences.”
Ives warned that the chip war is only escalating: “We’re going to see more punches thrown by both sides before this settles.”