Chip Stocks Slide as China Tightens Rare Earth Export Controls

Semiconductor equities faced broad selling pressure Friday after China imposed new export review requirements for rare earth minerals critical to chip production. Advanced Micro Devices led the decline with a 7.7% drop, while Nvidia and Intel fell 4.9% and 4% respectively.

The policy shift reflects Beijing's strategic MOVE to consolidate control over mineral resources that power modern technologies. China currently processes nearly 90% of global rare earth elements - essential inputs for semiconductors, EVs, and high-performance computing systems.

Market participants anticipate potential supply chain disruptions and margin compression across the semiconductor sector. The export review process could delay shipments and increase production costs for fabless chip designers reliant on Chinese suppliers.

Despite the selloff, AMD maintains a 78% YTD gain buoyed by AI processor demand, with Nvidia up 36% this year. The episode underscores the fragility of global tech supply chains amid escalating tech sovereignty battles.