NVIDIA corp, a designer of electronic chips, has received a request from the American authorities to no longer export chips to China. The affected chips are the A100 Tensor Core and H100 Tensor Core, these two products are intended for an essentially professional market, more specifically, they are tailored for the field of artificial intelligence, which includes more specific disciplines such as machine learning. They are used to train AI on a massive scale from models designed to accelerate machine learning tasks and are involved in image recognition with commercial and military applications. Source Reuters.
The company said the ban, which affects its A100 and H100 chips, could interfere with the completion of development of the H100, the flagship chip it announced this year. Last quarter, NVIDIA sold $400 million worth of these products to China, which gives an idea of the financial loss that the company could suffer if Chinese companies decide not to buy alternative Nvidia products. In addition to tensions around Taiwan where the chips are made.
As a result, Nvidia shares fell 6.6%. According to financial analyst Stacy Rasgon from Bernstein, about 10% of Nvidia's data center sales come from China, the impact on sales is manageable by Nvidia.
NVIDIA said it expected third-quarter sales to fall 17% from the same period last year.
Our analysis:
American restrictions on sales of electronic chips to China are not new, the Trump administration had already imposed restrictions on sales chips to HUWAI, this reflects a real American desire to restrict the transfer of advanced technology to China and can therefore be part of a lasting process. The stocks of the American electronic chip giants (NVIDIA and AMD) will be one to watch over the coming months.