Semiconductor Trade Restrictions Threaten EV, AI, and Industrial Progress in 2025

By Shubhendra Anand , 15 July, 2025

In 2025, the global semiconductor industry is already grappling with new and complex challenges emanating from the trade wars and policy changes between the United States and China. The semiconductor industry, an essential backbone of technology, suffers the consequences of an integrated economy and geopolitics, which, in consequence, hurts EVs, AI, and industrial manufacturing. As China’s access to semiconductors is made more difficult by new American tariffs and export control policies, analysts predict supply chain difficulties, increased costs, and a decline in advancement.

Like NVIDIA, TSMC, and Intel, the semiconductor industry is constantly changing economic conditions. This has forced big-name companies to rethink their supply chains. Shifts in China’s semiconductor manufacturing policies have created a severe deficit of advanced technologies. The US restrictions on the use of AI-related tech chips do not improve the situation, as it stifles productivity on a global scale. The outcome of all this creates a forecast for a spike in semiconductor demand and an even more significant price rise by the year twenty-five. This will put a strain on industries that rely on such technology.

With the exciting developments in battery management, Autonomous driving, and in-vehicle connectivity, the EV segment of the industry is also set to increase with demand. It will have to face issues solving the conjunction of slower production and rising costs. This means big-shot companies such as Tesla, BYD, and General Motors will face the awful cold hard truth of high-quality chip shortage, causing delivery delays and increased vehicle costs. This is not to say that there is also the issue of a limited supply of high-performance automotive semiconductors, which is severely stifling the development of EVs with built-in AI technology.

In 2025, the development of AI and the data center’s efficiency may be hurt due to restrictions on exporting AI-specific semiconductors to China. Leading data center operators like Amazon Web Services (AWS) and Microsoft Azure rely on NVIDIA’s AI chips. AI processing power and speed increase, supply chains become less affordable, and cloud computing, automation, and machine learning are negatively impacted. 

NVIDIA is most certainly the most affected of these due to the trade restrictions. Due to complex regulatory challenges, revenue growth from industrial automation, gaming, and AI infrastructure businesses might get stuck in the mud. Besides, with China being a significant revenue, Nvidia has to contend with losing market share if Chinese companies switch to domestic chip makers like SMIC. 

Industries will have to brace for policy changes and changes in supply chains to mitigate risk. While 2025 marks the key milestone for the semiconductor war, the global race to dominate technology will dictate the future of EVs, AI, and industrial manufacturing, all remaining dependent on the dominion of the semiconductor industry.

The figure shows Semiconductor Fab counts till 2024: