The U.S. has lifted export restrictions on advanced semiconductors, allowing companies like Nvidia and AMD to resume sales to China after a significant ban.

Nvidia's H20 and AMD's MI308 chips are now permitted for sale, a change that could generate billions in revenue for American firms.

Despite the easing of restrictions, SMIC reported a significant second-quarter revenue decline of 19.5% year-over-year, totaling $2,209.1 million, highlighting challenges from U.S. export curbs and increased competition.

However, SMIC expects the financial impact of the new U.S. tariffs and trade tensions to be minimal, predicting it will account for less than 1.3% of total revenue, thanks to strong domestic demand.

SMIC's production capacity is currently constrained due to a surge in domestic demand, with over 50% of its 8-inch wafer orders coming from local clients.

SMIC co-CEO Zhao Haijun indicated that many Chinese clients in the power semiconductor sector have significantly increased their orders, resulting in a tenfold rise in monthly wafer orders over two years.

In fact, SMIC claims that growing domestic demand in China is effectively replacing the need for foreign semiconductor suppliers.

Zhao also noted that many Chinese clients can effectively replace foreign chips with locally produced alternatives, particularly in the power semiconductor sector.

China aims for 100% self-sufficiency in chip production for the automotive sector, reflecting a broader national strategy to reduce reliance on foreign technology.

Geopolitical tensions persist, with concerns from the Cyberspace Administration of China regarding potential security risks associated with Nvidia's H20 chip, complicating expansion plans in China.

The article also includes performance data on various semiconductor stocks and ETFs, indicating mixed results for the sector.

Semiconductor stocks have reacted variably, with AMD up 42.92% year-to-date and 26.47% over the past year, while Nvidia has increased 30.70% year-to-date and 72.21% over the last year.