Wall Street’s semiconductor index lost more than $500 billion in stock market value on Wednesday in its worst session since 2020 after a report said the United States was mulling tighter curbs on exports of advanced semiconductor technology to China.

U.S.-listed shares of Dutch chipmaking equipment provider ASML Holding slumped 13% following the report even though it beat second-quarter profit estimates.

AI heavyweight Nvidia fell almost 7%, losing more than $200 billion in market capitalization.

Smaller rival AMD and Arm dropped about 10%. Micron fell 6% and Broadcom lost 8%.

Companies with U.S. chip manufacturing operations gained, with GlobalFoundries jumping almost 7% and Intel edging 0.35% higher. Some analysts believe Intel could benefit from the geopolitical tensions as it is building several plants in the country.

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President Joe Biden’s administration has moved aggressively to curb Chinese access to cutting-edge chip technology, including sweeping restrictions issued in October to limit exports of AI processors designed by firms including Nvidia.

The curbs have dented U.S. chipmakers’ sales to China. Nvidia’s revenue from China stood at about 18% of its total revenue in the quarter ended April 28, compared with 66% in the year-ago period.

Trump, seeking to regain the presidency in the Nov. 5 U.S. election, told Bloomberg Businessweek that Taiwan should pay the United States for its defense as it does not give the country anything. That sent U.S.-listed shares of Taiwan’s TSMC - the world’s largest contract chip maker - down 8%.

Taiwan plays an outsized role in the global chip supply chain. Analysts have warned that any conflict over the island may shatter the global economy.

The Philadelphia Semiconductor index collapsed 6.8% in its biggest one-day decline since the COVID pandemic sent global markets into a tailspin.

The index remains up 30% for 2024, outperforming the S&P 500 index’s 17% gain, thanks to the AI boom.

Editor：Vicky

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