Nvidia Issues New Concerns Regarding Impact of China’s Export Regulations
Nvidia Corp. acknowledged that the U.S. may impose stricter restrictions on the sale of chips to China and warned that such a move would be detrimental to U.S. companies in the long run, echoing a widely held sentiment among the industry’s leading chipmakers.
On a conference call with analysts late Wednesday, Nvidia’s chief financial officer, Colette Kress, argued that existing restrictions on selling AI chips and high-end components were already having the desired effect.
The company is prohibited from selling its high-end graphics processing unit (GPU) in China, although it does sell a less powerful version of the chip in the country.
“Over the long term, restrictions prohibiting the sale of our data center GPUs to China, if implemented, will result in a permanent loss of an opportunity for the US industry to compete and lead in one of the world’s largest markets,” Kress said following Nvidia’s earnings announcement.
The finance chief said she was addressing reports on the potential for increased regulations “on our exports to China.”
She stated that stricter regulations would not significantly impact Nvidia’s finances in the near future.
“Given the strength of demand for our products worldwide, we do not anticipate that additional export restrictions on our data center GPUs, if adopted, would have an immediate material impact on our financial results,” Kress said.
Jensen Huang, the chief executive officer of Kress, recently joined Intel Corp. and Qualcomm Inc. counterparts in a trip to Washington to advocate for a halt to the escalation of export controls.
The Biden administration asserts that restrictions are necessary to protect US national interests and prevent China’s military advancement.
According to Bloomberg, additional restrictions are being considered that would limit Nvidia’s ability to ship to the largest semiconductor market in Asia.
Wednesday, Nvidia, benefiting from an industry-wide race toward artificial intelligence computing, issued its third consecutive sales forecast that exceeded Wall Street’s expectations.
This contributed to a 6% share increase in late trading. The company generates roughly two-thirds of its sales outside of the United States, although it does not disclose sales in China.
Shadow Manufacturing Network in China
Parallel to these developments, Bloomberg News has reported that Huawei Technologies Co. is establishing a network of secretive semiconductor fabrication facilities across China.
This covert manufacturing network could potentially allow the blacklisted company to circumvent U.S. sanctions while advancing China’s technological ambitions.
As discussions around chip sales, export controls, and geopolitical dynamics continue, the semiconductor industry braces for potential shifts that could reshape its landscape.
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Source: Yahoo! Finance
