What's Going On With Nvidia, AMD And Semiconductor Peer Stocks On Wednesday?

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Chip stocks led by Nvidia Corp NVDA and Advanced Micro Devices, Inc AMD are trading lower Wednesday as the U.S. intensified semiconductor sanctions against China, followed by Presidential candidate Donald Trump’s attack against crucial contract chipmaker Taiwan Semiconductor Manufacturing Company TSM.

The Biden administration is contemplating using the Foreign Direct Product Rule (FDPR), which allows it to impose controls on foreign-made products that incorporate even minimal amounts of American technology, Bloomberg reports.

The U.S. has presented this possibility to officials in Tokyo and The Hague.

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Additionally, the U.S. is considering further sanctions on specific Chinese chip companies.

The U.S. semiconductor companies have significant exposure to China. Prior reports indicated Nvidia could sell $12 billion of AI chips in China this year despite U.S. export controls.

Meanwhile, former President Donald Trump has triggered jitters in the semiconductor sector with the latest remark.

The key Nvidia supplier, Taiwan Semiconductor, is trading lower on Wednesday after Trump said that the contract chipmaker should compensate the U.S. for its defense.

Trump suggested this during a Bloomberg Businessweek interview on June 25, which was published on Tuesday.

The broader chip sector is trading lower Wednesday, including Broadcom Inc AVGO, Qualcomm Inc QCOM, Arm Holdings Plc ARM, Micron Technology Inc MU, Marvell Technology Inc MRVL, Microchip Technology Inc MCHP, STMicroelectronics Inc STM, ON Semiconductor Corp ON, GlobalFoundries Inc GFS, United Microelectronics Corp UMC, Skyworks Solutions Inc SWKS.