Semiconductor Cycle & Chip Export Controls

Dated events

1. Oct. 7, 2022 · US Commerce Department curbs advanced chip and chipmaking tool exports to China
   The US Commerce Department announced sweeping rules blocking the sale of advanced chips and chipmaking equipment to China, targeting Nvidia GPUs and tools from US companies like Lam Research and Applied Materials. This scared investors because it meant major chipmakers could suddenly lose one of their biggest customers, and equipment suppliers faced an uncertain future. In the following days, chip stocks across the US, Europe, and Asia dropped as companies scrambled to figure out how much business they would lose.
2. Jan. 27, 2023 · US, Japan and Netherlands reportedly agree to curb chip tool exports to China
   The US, Japan, and the Netherlands reached a deal to jointly limit exports of advanced chipmaking machines to China, directly affecting ASML and Tokyo Electron. Markets worried because this closed loopholes that had let China buy cutting-edge equipment from non-US suppliers, tightening the squeeze on the global chip supply chain. Over the next months, both ASML and Tokyo Electron had to publicly explain how much China revenue they expected to lose.
3. May 24, 2023 · Nvidia reports Q1 fiscal 2024 results, forecasts $11B quarterly revenue
   Nvidia reported earnings and predicted its next quarter's revenue would be about $11 billion, far above what anyone expected, driven by enormous demand for AI-related chips. This mattered because it signaled that a huge new wave of chip buying was underway, lifting hopes for chip suppliers and memory makers worldwide. In the days and weeks after, share prices of chip companies across the US, Asia, and Europe jumped as investors bet the AI boom would benefit the whole industry.
4. Oct. 17, 2023 · US tightens China chip export rules, adding Nvidia's A800 and H800
   The US government updated its chip export controls to close workarounds that had allowed some advanced chips to still reach China, specifically targeting redesigned Nvidia products. Investors in chipmakers and equipment firms worried again because each new restriction meant less potential revenue from China and more uncertainty about future rules. ASML and other equipment makers saw their shares fall as analysts recalculated how much Chinese business was now truly off-limits.
5. July 17, 2024 · Bloomberg reports US weighs its toughest chip curbs on ASML and Tokyo Electron
   Bloomberg reported that the US was considering even stricter rules that could pressure the Netherlands to stop ASML from servicing some equipment already in China. This frightened investors because it suggested the trade restrictions could keep expanding with no clear end, threatening a large and profitable part of ASML's business. European and Asian chip stocks fell sharply over the following days as people feared a broader crackdown on the entire semiconductor supply chain.

Assets named in this scenario · 16

Advanced Micro DevicesAdvantestASM InternationalASMLBE SemiconductorBroadcomInfineonInteliShares Semiconductor ETFMicron TechnologyMurata ManufacturingNvidiaSTMicroelectronicsTaiwan Semiconductor (ADR)Tokyo Electron LimitedVanEck Semiconductor ETF

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