Chip stocks surged on Wednesday as major semiconductor companies delivered strong earnings and news emerged that China has approved the sale of Nvidia’s H200 chips to key domestic tech firms. The VanEck Semiconductor ETF rose more than 3% in premarket trading, reflecting broad market optimism. In Europe, ASML led the rally, gaining 5% in morning trade, with other semiconductor leaders like Infineon and STMicroelectronics also posting gains. The Dutch chipmaker reported robust fourth-quarter results, with revenue and orders exceeding analyst expectations. ASML also raised its 2026 sales forecast, signaling sustained demand for its advanced lithography machines despite ongoing global supply chain challenges. South Korea’s SK Hynix followed suit, closing over 5% higher after announcing record full-year profits for 2025. The company attributed its strong performance to increased demand for memory chips, particularly from data centers and AI-driven applications. The biggest catalyst for the market move came from a Reuters report indicating that China has cleared the way for major domestic tech companies—including ByteDance, Alibaba, and Tencent—to purchase Nvidia’s H200 AI accelerators. This marks a significant shift, as China had previously restricted access to high-performance U.S. chips, pushing companies to develop or adopt domestic alternatives. Although the U.S. government had earlier signaled approval for H200 exports to China, Beijing’s regulatory stance had remained cautious. In May, Nvidia had warned that export restrictions could cost the company up to $8 billion in lost sales. The new development suggests a thaw in the trade standoff, potentially unlocking a major revenue stream for Nvidia in one of the world’s largest tech markets. Nvidia shares rose about 1.6% in premarket trading, reflecting investor confidence in the company’s ability to regain ground in China. The approval is seen as a turning point in Nvidia’s strategy to maintain its dominance in the global AI chip market, even amid geopolitical headwinds. The rally underscores growing momentum in the semiconductor sector, driven by strong financial results and renewed optimism around global demand, particularly for AI infrastructure.