AI Chip Stocks Gain Momentum On Taiwan Semiconductor Performance; Biden's Semiconductor Sanctions Kick In

Artificial intelligence chip stocks including Nvidia Corp NVDA, Broadcom Inc AVGO, Marvell Technology, Inc MRVL, Advanced Micro Devices, Inc AMD, Qualcomm Inc QCOM, Arm Holdings ARM, and Micron Technology, Inc MU, are trading higher Thursday in sympathy with Taiwan Semiconductor Manufacturing Co’s TSM upbeat quarterly print.

Taiwan Semiconductor is the key contract chipmaker behind Nvidia’s graphics processing units (GPU) and Apple Inc.’s AAPL smartphones.

However, on Wednesday, the Biden administration announced its latest semiconductor regulations, including extended licensing requirements on companies like Taiwan Semiconductor, which manufactures chips, and packaging companies, citing national security threats.

Also Read: Apple And Nvidia Supplier Taiwan Semiconductor Leads Semiconductor Market with 64% Share

Chipmakers like Taiwan Semiconductor and Samsung Electronics SSNLF must ramp up due diligence especially with China-based firms.

Washington imposed sanctions on 16 Chinese companies, including Sophgo Technologies, for building their country’s chip industry, Bloomberg cites the Commerce Department.

On Monday, the U.S. disclosed sanctions on the sale of AI chips by Nvidia and other advanced makers to data centers in most countries.

The rules for AI chips follow controls announced in December that aim to block Beijing’s access to high-bandwidth memory chips from Micron.

Semiconductor chip stocks enjoyed a massive upside in 2024, backed by the AI boom.

A third of the top ten global companies with valuations above $1 trillion in 2024 came from the chip industry.

Investors can gain exposure to stocks of companies that manufacture semiconductors through ProShares Ultra Semiconductors USD and Invesco PHLX Semiconductor ETF SOXQ.

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