Written by Tui Eruera, CEO and Founder of Jaaims
Published 27th October 2022
We saw extraordinary news come out of the US recently, when the Biden administration announced export restrictions on advanced chips to China. But Jaaims saw it coming.
The US has long dominated the advanced semiconductor industry, and it’s going to great lengths to hobble China as it tries to catch up.
In August, the Biden administration heralded in the CHIPS Act, which provides $US52 billion worth of subsidies to US semiconductor manufacturers.
But early October saw a fresh step in the battle for tech supremacy.
The US has introduced new export controls that prevent artificial intelligence (AI) and semiconductor technologies manufactured in the US being shipped off to China.
And they’re pretty tough restrictions.
A remarkable aspect of the executive order is that US citizens can’t work in the Chinese semiconductor industry. This could see US nationals working within the tech industry inside China forced to rethink their career options.
It’s a no-brainer that the export restrictions help the US maintain its technological and military lead over Beijing.
However, the restrictions mean leading US AI computer chip designers such as Nvidia and AMD (Advanced Micro Devices), can no longer sell their high-end chips to China. And China is a big market.
Not surprisingly, this hasn’t gone down well with investors.
Shares in AMD have fallen from $US104 in early August to $US58 at present. It’s a similar story for Nvidia, which was trading at $US190 just six weeks ago, and is now limping along at $US118.
That said, shares in both companies have started to creep up over the past few days. It’s a sign that buyers may be coming back into the space, and that’s no great surprise either, because on fundamentals alone, both stocks look cheap right now.
What is intriguing, is that Jaaims exited chip positions back in April.
It’s a clear example of how the AI that drives Jaaims is ready to protect your investments in times of downturn – and take advantage when the time is right, often before the rest of us have caught up.
This is an area we’ll be monitoring closely in the coming weeks. Jaaims offers a targeted portfolio in this sector that allows investors to capitalise on the opportunities presented by events in the chip industry. We’ll keep you posted on how Jaaims responds.
*Any advice provided is general in nature and does not take into account the viewer’s specific needs and circumstances. You should consider your own financial position, objectives and requirements to determine the type of advice and products to best suit your needs. Jaaims Australia is an Authorised Representative of Jaaims Technologies, AFSL 519985.