Biden's Final Chip Curbs Set To Shake AI Markets: 10 ETFs With High Stakes In Nvidia, AMD

As Washington ramps up chip export restrictions to unfriendly countries, Nvidia Corp. NVDA and Advanced Micro Devices Inc. AMD are in the midst of a geopolitical power shift that could disrupt the semiconductor industry’s global landscape.

In a report shared Monday, Bloomberg outlined the Biden administration’s imminent release of updated export rules targeting advanced semiconductors.

The new measures, expected to drop Friday, intensify the U.S.’s strategic efforts to slow China's technological and military advancements by restricting access to high-performance computing chips.

New AI Export Framework: Allies And Adversaries

The regulations will reportedly create a three-tiered structure for semiconductor exports, emphasizing access tiers for key U.S. allies, neutral nations, and restricted countries.

China is expected to fall under the most severe tier, joining nations such as Russia, Iran, and Venezuela.

This tier-based framework allows certain companies in restricted countries to bypass national limits by agreeing to U.S. security protocols and human rights standards.

These entities, designated as validated end users, would have higher caps for chip purchases, a move aimed at encouraging safer AI development globally.

The measures expand the sweeping export restrictions initiated in October 2022, which already limited sales of advanced AI chips like Nvidia's Hopper GPUs.

These earlier rules also prohibited U.S. firms and individuals from supporting Chinese chip development without explicit government approval.

Nvidia And AMD Under Scrutiny

Nvidia's specialized A800 and H800 chips, developed to comply with prior regulations, could now fall under new restrictions, potentially denting AI giant’s upcoming revenues.

According to data firm FactSet, China accounts for approximately 16% of Nvidia’s revenue, making it the company's second-largest market after the U.S. This marks a decline from 25% prior to the 2022 export restrictions.

In 2023, AMD generated roughly $3.4 billion in revenue from China, including Hong Kong, according to Statista. This represents 15% of the company’s total revenue of $22.7 billion.

Key ETFs Tied To Nvidia And AMD

Several ETFs heavily exposed to Nvidia and AMD could face ripple effects:

Top ETFs Holding Nvidia (Percentage of Holdings):

• ProShares Ultra Semiconductors USD: 34.96%
• Strive U.S. Semiconductor ETF SHOC: 21.10%
• YieldMax Target 12 Semiconductor Option SOXY: 20.50%
• VanEck Semiconductor ETF SMH: 20.21%
• VanEck Fabless Semiconductor ETF SMHX – 20.11%

Top ETFs Holding AMD (Percentage of Holdings):

• VanEck Video Gaming and Esports ETF ESPO: 8.01%
• iShares Semiconductor ETF SOXX: 7.12%
• AOT Growth and Innovation ETF AOTG: 7.07%
• Invesco PHLX Semiconductor ETF SOXQ: 7.04%
• REX FANG & Innovation Equity ETF FEPI: 6.95%

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