Specifically, the Trump administration wants to limit exports on chips produced by U.S.-based companies, including plenty held by ETFs such as the Invesco (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ). The White House recently proposed a three-tier list of countries as it pertains to potential chip export restrictions.
In the top tier, nations such as Japan, South Korea, and many throughout Europe would be able to access semiconductors made by U.S.-based QQQ/QQQM member firms. India, among others, is in the second tier, where there would be some controlled access, while adversaries like China, Iran, North Korea, and Russia would have no ability to import to chips produced by U.S. firms.
That system has clear implications for many chip companies residing in QQQ and QQQM. As Stephanie Aliaga, global market strategist at J.P. Morgan Wealth Management, pointed out, “Nvidia may design its chips in California,” but that process involves a supply chain that spans Japan, Malaysia, the Netherlands, and Taiwan.
Investors Searching for Clarity
Helped by weekly rallies by Nvidia and Broadcom AVGO, among other chip stocks, QQQ and QQQM posted impressive gains last week. But investors are still demanding clarity on the White House’s chip restrictions, including less ambiguity on the AI Diffusion Rule.
“The rollout will clarify how license requirements and distribution constraints affect near-term revenue, and companies selling into Tier 2 and Tier 3 countries may come under pressure,” added Aliaga.
Of course, U.S. rivals aren’t taking the semiconductor restrictions lying down. And that’s on the minds of investors considering chip stocks and ETFs like QQQ and QQQM. For example, China is planning sizable expenditures to shore up its domestic semiconductor industry.
“China is already pouring $100+ billion of government incentives in building Chinese [fabs. And] the DeepSeek breakthrough earlier this year revealed [its] relative success in AI capabilities despite U.S. restrictions,” noted Aliaga.
Domestic semiconductor companies have options, too. Those include moving production to countries perceived as friendly. That could result in higher labor costs. But it’s a trade-off for dependability and compliance with new White House directives. What is clear is that QQQ/QQQM investors need to account for politics regarding the semiconductor industry.
“Chip supply chains are becoming more politicized. In this new environment, investors should expect uneven impacts—some companies may adapt quickly, others more painfully. Resilience matters just as much as innovation,” concluded Aliaga.
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