Shares in semiconductor companies surged Tuesday following Nvidia’s (NASDAQ:NVDA) announcement that it expects to soon restart sales of its AI-powered chips in China.
Ahead of U.S. market open, Nvidia’s stock rallied over 5%, boosting related firms such as Advanced Micro Devices (NASDAQ:AMD), Micron (NASDAQ:MU), Broadcom (NASDAQ:AVGO), and Marvell (NASDAQ:MRVL). European semiconductor leaders—including ASML (EU:ASML), ASM International (EU:ASM), BE Semiconductor (EU:BESI), Infineon (TG:IFX), and STMicroelectronics (NYSE:STM)—also saw gains.
Nvidia revealed Monday that it is set to resume selling its H20 processor in China in the near future, reflecting improving trade ties between Washington and Beijing. This development follows CEO Jensen Huang’s discussions with officials from both countries.
The company additionally unveiled a new graphics processing unit tailored for the Chinese market, designed to support AI applications in smart manufacturing and logistics.
Nvidia confirmed it is actively applying for licenses to sell the H20 chip again, with U.S. authorities signaling that approval is forthcoming. This follows recent easing by Washington of restrictions on exporting advanced chip technology to China, which also benefited other chip design firms like Synopsys (NASDAQ:SNPS).
Morgan Stanley analysts cautioned that uncertainties in U.S.-China relations remain a potential obstacle, especially with the August 12 deadline looming for the possible expiration of the current tariff truce. However, they noted these steps suggest positive momentum in the trade relationship.
Earlier this year, tougher U.S. licensing rules had barred Nvidia from selling its H20 chips in China, forcing the company to anticipate billions in charges tied to those limitations. The subsequent easing of tariffs between the two nations in May and June has reignited optimism about a more stable trade environment.
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