April 15, 2025

Nvidia's $5.5B China Shockwave Sparks Tech Stock Slide as Xpeng Debuts Rival AI Chip

Round-up

  1. US blocks Nvidia’s H20 chip exports to China indefinitely – The Trump administration’s surprise licensing mandate forces Nvidia to write down $5.5B in Q1, triggering a 6% after-hours stock plunge12.
  2. Xpeng unveils in-house AI chip outperforming Nvidia’s Orin X – The Chinese EV maker’s Turing chip triples computing power for L4 autonomous driving, targeting global markets by 20263.
  3. South Korea pledges $23B semiconductor lifeline – The package aims to counter US tariff pressures, protecting an industry representing 20% of national exports45.

Other developments

  • Fujifilm wins Intel’s 2025 EPIC Supplier Award for advanced photolithography materials6
  • ON Semiconductor abandons Allegro MicroSystems acquisition7
  • Nasdaq futures drop 1.5% on US-China tech trade fears25

Did you know? Moore’s Law’s economic benefits stalled in 2018 – TSMC’s N7 node was Apple’s last major cost-per-transistor improvement, with wafer prices now rising8.

In-Depth Analysis

Government & Corporate Policy

  • Nvidia’s China business collapses under new export rules142
    • US Commerce Dept mandates indefinite licenses for H20/MI308 chip exports, citing supercomputer risks
    • Move follows Nvidia’s $500B US manufacturing pledge, revealing policy whiplash
    • Analysts warn Huawei may fill China’s $7B AI chip gap within 18 months
  • South Korea’s $23B chip sector bailout45
    • Package includes tax breaks, R&D grants, and infrastructure for Samsung/SK Hynix
    • Response to US threats of 49% tariffs on electronics containing foreign chips
    • Strategy mirrors EU Chips Act but risks global subsidy race escalation

Economics & Finance

  • Nvidia’s $5.5B inventory writedown142
    • Charge reflects 400,000 H20 units stranded in supply chain
    • Blackwell production accelerates in Arizona TSMC fab, but China revenue gone
    • Competitors AMD/Intel gain 3% in pre-market on revised AI forecasts
  • Tech stocks tumble on trade fears25
    • Nasdaq futures down 1.5%, S&P tech sector -0.9%
    • Asian markets mixed: SMIC +2.3% on substitution hopes, TSMC -1.1%
    • Goldman Sachs cuts 2025 global chip growth forecast to 6.7% (from 8.9%)

Technology & R&D

  • Xpeng’s Turing AI chip challenges Nvidia3
    • 3x Orin X performance at 40% power draw via custom 5nm design
    • Targets 3.2T FLOPs for robotaxis/flying cars – mass production Q3 2025
    • Uses hybrid architecture blending GPU/ASIC elements
  • 2D semiconductor breakthrough at RISC-V scale9
    • Functional processor built with atomically thin materials (MoS₂/WS₂)
    • Early benchmark: 79% lower static power vs 3nm FinFET
    • Commercial viability remains 10-15 years out per researchers
  • Fujifilm dominates advanced litho materials6
    • Wins Intel EPIC award for EUV photoresists/CMP slurries
    • Supplies 72% of global high-NA EUV chemical market
    • New 2nm-compatible underlayer boosts yield 14% in Intel trials

  1. Nvidia Warns Trump Curbs on China Chips to Cost $5.5 Billion ↩︎ ↩︎ ↩︎

  2. Nvidia Warns Trump Curbs on China Chips to Cost $5.5 Billion ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  3. Xpeng to Use Own AI Chip for Self-Driving Cars ↩︎ ↩︎

  4. Nvidia Says U.S. Will Restrict Sales of More of Its A.I. Chips to China ↩︎ ↩︎ ↩︎ ↩︎

  5. Exempt or Not, the Chip Industry Won’t Escape Tariffs ↩︎ ↩︎ ↩︎ ↩︎

  6. Fujifilm Wins Intel EPIC Award ↩︎ ↩︎

  7. ON Semiconductor Ends Allegro Bid ↩︎

  8. Moore’s Law Slowdown ↩︎

  9. 2D Semiconductor RISC-V Processor ↩︎