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NVIDIA stands to lose the most as the Biden administration prepares to tighten the proverbial noose around China’s tech sector, which is likely to bifurcate the global chip supply chain, much to the chagrin of ASML.

As we reported yesterday, the Biden administration is now seeking to ban the sale of AI chips to China without an explicit export license. The ban might even extend to the provision of cloud services to Chinese AI companies, which have long used data center chips as a cover to skirt restrictions on advanced semiconductors.

Should these restrictions materialize, they would add to the measures that the US Commerce Department took back in September 2022, when NVIDIA’s A100 and H100 chips, along with AMD’s MI250 chip, were placed under a similar export control regime.

NVIDIA CFO EXPECTS NO MATERIAL CHANGE TO EARNINGS FROM RULES https://t.co/sGVWWN7qBS

— *Walter Bloomberg (@DeItaone) June 28, 2023

Today, NVIDIA disclosed that China accounts for between 20 and 25 percent of its data center-related sales. However, in what prima facie appears to be a contradiction of sorts, the company maintains that there would be no “material change” to its earnings from the upcoming changes in chip export controls.

Of course, independent analysts do expect a material impact from these changes. According to the Bank of America analyst Vivek Arya, 7 percent of NVIDIA’s total revenues and 10 percent of data center sales could be impacted if China-related export curbs are placed on the sale of A800 and H800 data center chips.

Meanwhile, the world’s exclusive manufacturer of extreme ultraviolet (EUV) lithography machines, ASML, continues to voice its concern as to the unfeasibility of decoupling chip supply chains. In an interview with Nikkei Asia, ASML’s executive vice president and chief business officer, Christophe Fouquet, noted:

“We do not believe in ASML that decoupling is possible. We believe this will be extremely difficult and extremely expensive.”

He went on to state:

“The idea that we could go back to a little dark corner and do it all alone is most probably a very challenging concept.”