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On Friday, the forecasts from Advanced Micro Devices and Samsung Electronics reported lower chip-related shares. It sparked fears that a decline in demand for semiconductors could increase than expectations. NVIDIA Corporation, AMD, Intel Corporation, Micron Technologies, and Qualcomm declined between 1.2% and 6.0%.

The move was supposedly evaluating smaller peers such as Applied Materials and Marvell Technology. Samsung is one of the top producers in the world making televisions, smartphones, and memory chips. The company is also a leader in global consumer demand but discouraging opening results add to the turmoil of earnings downfalls.

Most Analysts Dropped Share Price Expectations

The chip industry is experiencing record weak demand following decades-high inflation, increasing interest rates, Chinese lockdowns, and geopolitical issues. It massively disturbed the PC and smartphone market as businesses with limitations in consumer expenses. More than a dozen analysts dropped their price expectations on the shares of AMD at $50.

Keep in mind that a US-based chip-making firm ripped its 3rd quarter revenue perspective with around $1 billion. Experts believe a warning from AMD will reflect the most negative impact for Intel, NVIDIA, and related memory & data center elite. Most chip-buying firms are smartphone and PC makers, have stopped new purchases, and utilizing their existing inventory.

A Significant Drop in Demand Led to Lower Shipments

However, a significant decline in demand also led to lower shipments and moved the industry toward a downward trend. Experts think the industry is moving toward to its massive in a decade amid a high supply chain with declining demand. In August, global chip sales increased only 0.1% and marked its 15th lowest month since June 2021.

Meanwhile, shares of key US chipmakers have dropped between 3rd quarter and half of their value in 2022. The shares of Chinese tech giants Tencent and Alibaba Group dropped on Monday. New US export control policies designed to slow down the tech and military advancements of Beijing threatened most investors. On Friday, the Biden administration published new policies over export controls.

The New Measures will Stop Exporting Tech to China

The new measures include cutting off China from specific semiconductors produced anywhere in the world using US equipment. However, most of the measures will take immediate effect with a major change in exporting tech to China. Experts believe the new policies will have a major impact on Chinese firms. New policies will slow China’s efforts to manufacture its own chip industry and advancement in commercial & state research.

The new controls include artificial intelligence, military weapons, data centers, and various other sectors involving supercomputers and advanced chips. The new policies come at a time when the global chip industry is experiencing a massive downtrend. US companies are supposedly ceasing to supply Chinese chipmakers with equipment used to manufacture advanced chips.

The New Policies will Stop Inventions in the East & West

It includes logic chips below 16 nm, DRAM ships under 18 nm, and NAND chips featuring 28 layers. The measures will stagger the Chinese chip industry and will obstruct various growth plans. The new rules will considerably set back inventions in both East & the West. There are a plethora of platforms conducting top-level meetings in the next couple of days.

However, Chinese firms have a proportion of the global contract chip market intimidated by TSMC of Taiwan. TSMC controls around 70% of the domestic market degrading Beijing’s efforts to enhance self-reliance in chips. Experts believe the new policies will now pose key challenges for 2 Chinese memory chipmakers including YMTC and CXMT.