Nvidia Stock Is Falling Tuesday - Here's Why

Nvidia Corp NVDA continues to top headlines with artificial intelligence endeavors as the U.S. prepares to intensify its semiconductor technology embargo on China.

The U.S. government divulged plans to halt shipments to China of more advanced AI chips designed by Nvidia and others, citing military threats.

The fresh sanctions extend across several countries, including Iran and Russia, and blacklist Chinese chip designers Moore Thread and Biren, Reuters reports.

The latest embargo will hit Nvidia's A800 and H800 chips, tailor-made by the chip designer to comply with China's previous sanctions due to a change in chip parameters.

Interestingly, the rules will exempt most consumer chips used in laptops, smartphones, and gaming, with some subject to licensing by U.S. officials.

Meanwhile, Taiwanese testing companies and probe card providers plan in advance to beat the U.S.'s stricter restrictions on Chinese chipmakers, and Nvidia's downgraded AI H800 processors, Digitimes reports.

Nvidia CEO Jensen Huang is in Taiwan for a week, and his only public engagement for October 18 is Hon Hai Tech Day (HHTD).

Huang will offer a blueprint vision for Nvidia and Foxconn's partnership in AI, electric vehicles, and other industries along with Apple Inc AAPL partner Hon Hai Precision Industry Co Ltd HNHPF Foxconn chairman Young Liu, reports indicate.

Foxconn's collaboration with Nvidia dates back several years, with Foxconn being a part of the supply chain for servers, cabinets, modules, substrates, and motherboards that use Nvidia's latest AI GPUs.

Huang's tour will also include meetings with key supplier Taiwan Semiconductor Manufacturing Company Ltd TSM and other local Taiwanese partners like Quanta Computer and Gigabyte Technology, focused on supplying Nvidia's popular AI GPUs and TSMC's capacity support for CoWoS packaging manufacturing capacity.

Foxconn subsidiary Ingrasys is currently experiencing a massive demand surge. The factory workers work overtime to produce high-end servers equipped with the Nvidia H100 chip.

Price Action: NVDA shares traded lower by 6.08% at $432.96 on the last check Tuesday.