The House Foreign Affairs Committee advanced bipartisan bills including the Multilateral Alignment of Technology Controls on Hardware Act, which proposes strict limits on exporting high-end chip-manufacturing equipment and AI processors to China. The legislation aims to align U.S. policy with allied controls and restrict semiconductor technology transfers deemed critical to national security.

China’s Commerce Ministry issued a warning that these measures could cause severe disruptions to the global semiconductor supply chain and undermine international trade order. The ministry has pledged to assess its options and take necessary steps to protect domestic firms, hinting at potential export restrictions on rare earth minerals.

The proposed restrictions threaten Nvidia’s ability to ship AI chips and advanced processors to its largest market, potentially reducing sales growth and disrupting its supply chain partnerships. Tighter controls on manufacturing equipment could delay capacity expansions at foundry partners, raising production costs and lead times.

Investors now factor in elevated geopolitical risks as tech demand climbs, driving volatility in semiconductor stocks. A prolonged technological decoupling may spur Nvidia to diversify manufacturing sources and accelerate research into alternative materials and chip architectures.