The recent tightening of U.S. export controls on AI chips to China has significantly impacted the semiconductor sector, with tech ETFs heavily invested in Nvidia and similar companies experiencing a sharp decline. The VanEck Semiconductor ETF (SMH) fell by over 3.75%, driven by Nvidia's warning of a $5.5 billion charge due to new licensing requirements, along with AMD facing similar issues amounting to $800 million. The harsh market conditions were further reflected in the broader indices, causing increased volatility as seen through the CBOE VIX index's 3% rise.
The semiconductor sector is facing significant challenges, particularly with tech ETFs heavily invested in Nvidia and other chipmakers being adversely affected by recent market dynamics.
The VanEck Semiconductor ETF (SMH) dropped over 3.75% following stricter U.S. export controls on AI chips to China, impacting key players like Nvidia and AMD.
Nvidia's warning of a $5.5 billion charge resulting from export license requirements for its H20 processors exemplifies the profound impact of these regulatory changes.
The market's overall decline, with the Nasdaq Composite falling 1.76%, reflects increasing investor anxiety, as indicated by a 3% rise in the CBOE VIX index.
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