U.S. H20 Chip Ban Hits NVIDIA, ASML Lose $155B

The U.S. government has intensified its restrictions on AI chip exports to China by banning the shipment of NVIDIA's China-specific H20 AI chips. This sudden move sent shockwaves through the global semiconductor and technology sectors, wiping out over $155 billion in combined market value from NVIDIA and Dutch chip equipment leader ASML.

NVIDIA disclosed that due to the unexpected nature of the new regulation, the company will record approximately $5.5 billion in inventory and procurement-related charges for the fiscal quarter ending April 27. The restriction also affects AMD's MI308 and other chips with comparable performance.

Following the announcement, NVIDIA's stock fell by as much as 7.1% in pre-market trading. AMD also dropped over 6%, while other major players like Micron, Broadcom, and Intel experienced declines ranging from 2% to 4%.

Analysts estimate that China contributed up to $1.7 billion in revenue to NVIDIA last year—accounting for more than 13% of its total revenue—highlighting the significant impact this ban could have on its China operations. According to Morgan Stanley analysts, “While we anticipated some level of restriction on the H20, the sudden enforcement and associated inventory write-downs suggest overly optimistic revenue projections, which may further weigh on NVIDIA's financial performance.”

ASML's earnings met revenue expectations, but weaker-than-expected new orders and cautious guidance for 2025 and 2026 raised additional concerns. The company acknowledged challenges in assessing the long-term impact of U.S.-China trade tensions and tariffs. ASML's stock fell as much as 7.6%, pulling down the European STOXX 600 technology index by 2.2%.

Industry experts note that while the AI boom is ongoing, multiple uncertainties—including export restrictions, geopolitical tensions, and interest rate fluctuations—are now hindering large-scale capital expenditure in the tech sector. Jacob Falkencrone, Head of Investment Strategy at Saxo, commented, “The AI-driven growth cycle may be cooling off. All eyes are now on whether capital spending by major firms like Google, NVIDIA, and Microsoft will continue.”

Asian tech markets also came under pressure. TSMC dropped 2.5%, South Korea's SK Hynix declined 3.7%, and Japan's Advantest tumbled 6.6%. U.S.-listed Chinese tech stocks followed suit, with Alibaba falling 2.2% and Baidu down 1.5% in pre-market trading.

Although the H20 chip was specifically designed with downgraded specifications to comply with prior U.S. regulations, it still features high-speed memory interconnect capabilities. U.S. officials are concerned about its potential use in China's supercomputing initiatives, prompting the latest ban. Analyst Stacy Rasgon criticized the decision as “pointless,” suggesting it may simply hand more market share to Chinese firms like Huawei.

In contrast, select Chinese semiconductor companies saw gains. Hua Hong Semiconductor rose 0.6%, while Advanced Micro-Fabrication Equipment Inc. (AMEC) climbed 2.5%. Vey-Sern Ling, a director at Union Bancaire Privée, noted, “The H20 ban is unlikely to stall China's AI innovation. On the contrary, it may accelerate domestic chip development and adoption.”