NVIDIA’s shares listed on the NASDAQ market in the U.S. closed at $410.17, down 2.89% from the previous session. Since closing at $493.51 on the 31st of last month and hitting an all-time high based on the closing price, the downward trend has continued for nearly a month. It has been on the decline for the longest time this year. During this period, the decline in stock prices reached 17%.
Analysts say that concerns that semiconductor export controls to China could serve as a major negative factor for NVIDIA’s shares performance are dragging down stock prices. The U.S. government, which blocked the export of NVIDIA AI semiconductors to China, recently restricted sales to Middle Eastern countries. The reason was that Middle Eastern countries had been working closely with China on developing core technologies.
As the U.S. government’s export control over NVIDIA’s AI semiconductors is getting stronger, concerns are growing over a decline in sales. Earlier in October last year, the U.S. government announced measures to ban the sale of U.S. high-tech semiconductor equipment to Chinese semiconductor manufacturers and restrict exports of semiconductors used in artificial intelligence (AI) and supercomputers.
NVIDIA also acknowledged that controls on semiconductor exports to China could hurt the company’s growth in the long run. “In the long run, the U.S. government’s additional restrictions on exports to China will permanently lose the opportunity to compete and lead (the market) in China, one of the world’s largest markets,” NVIDIA Chief Financial Officer Collette Cress said on a conference call after the second-quarter earnings report. A foreign media outlet said, “Expectations for the overall semiconductor industry are worsening as the conflict between the U.S. and China to win global semiconductor hegemony intensifies.”
The shock from TSMC, the world’s largest semiconductor foundry (consignment production) company, also encouraged the stock price to fall. TSMC believes that the recovery of demand for semiconductors is progressing at a much slower pace than expected, and has asked major equipment suppliers such as ASML in the Netherlands to delay delivery. As orders have not increased as expected due to the prolonged economic downturn, the time of operation of the plant being built in Arizona, U.S., has been delayed by about a year to 2025.