China’s export ban on chips hit U.S. markets on December 3, 2024. The ban threatens $3.4 billion in potential GDP losses. The impact of U.S. semiconductors is shown most clearly in the stock prices of three major chip makers. This comes amid rising tensions over AI chip stocks between the world’s largest economies.

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How China’s Export Ban on Gallium and Germanium Affects U.S. Semiconductor Stocks and the AI Industry

1. Intel (INTC) Performance

Intel traded at $21.00 when the ban started. The stock dropped 0.5% on December 3. Intel saw the biggest monthly loss of major chip makers at -20.57%. This decline started before the ban. Markets may have expected the ban, or other factors could have driven the drop.

2. Advanced Micro Devices (AMD) Market Response

AMD’s stock price fell heavily before the ban. It dropped from $140 to about $130 near December 3. The company lost 5.57% over the month. The ban announcement didn’t cause one big drop but added to ongoing losses.

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3. NVIDIA’s (NVDA) Stock Movement

NVIDIA’s stock fell on December 3, and the losses continued in the following days. A -5.97% monthly loss matched wider semiconductor sector problems. The China chip export ban affected the entire market.

Material Supply Impact

China stopped exporting gallium and germanium to the U.S. These materials are key for semiconductor and electronic device manufacturing, impacting multiple sectors. USGS data shows the semiconductor industry faces the heaviest impact at 40% of total losses.

Other affected sectors include electronic computer manufacturing, photographic equipment, and household appliances. If exports fully stop, the USGS expects gallium prices to rise 150% and germanium prices to rise 26%. These increases affect AI chip stock values directly across the manufacturing chain.

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Industry Response and Future Outlook

Stock prices showed quick reactions to the ban. But longer trends point to multiple industry challenges. Tennessee’s new $150 million plant could make 80% of U.S. gallium and germanium needs. Still, stock prices show investors remain worried about near-term supplies.

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Looking at all three stocks shows the ban made existing problems worse. Each company faces different levels of risk from supply chain problems.

Chip makers must now rebuild their supply chains. The China chip export ban forces them to find new material sources while dealing with market uncertainty.