Chip stocks fall on report U.S. could terminate waivers for Taiwan Semi and others

Semiconductor stocks experienced a notable dip on Friday following reports that the U.S. government is contemplating the termination of waivers that permit certain chip manufacturers to transfer American technology to China. According to the Wall Street Journal, Commerce Department official Jeffrey Kessler informed major players such as Samsung Electronics, SK Hynix, and Taiwan Semiconductor about plans to rescind these waivers, which currently enable them to utilize U.S. chipmaking technology in their Chinese facilities. The VanEck Semiconductor ETF saw a decline of approximately 1%. Major companies like Nvidia, Qualcomm, and Marvell Technology also fell around 1%, while Taiwan Semiconductor's stock slipped by about 2%. U.S. chip manufacturers have faced increasing restrictions over the past few years, specifically targeting the sale of advanced artificial intelligence chips to China due to rising national security concerns. In its recent earnings report, Nvidia disclosed that new export restrictions on its H20 chips destined for China had resulted in an estimated $8 billion loss in sales. Nvidia CEO Jensen Huang highlighted the severity of the situation during an earnings call, stating that the lucrative $50 billion AI chip market in China is "effectively closed to U.S. industry." He previously referred to the barriers preventing entry into China's AI market as a "tremendous loss" during a CNBC interview in May.