Nvidia stock falls after U.S. government restricts chip sales to China

FrgMstr

Just Plain Mean
Staff member
Joined
May 18, 1997
Messages
55,532
Nvidia stock falls after U.S. government restricts chip sales to China
PUBLISHED WED, AUG 31 20226:07 PM EDTUPDATED WED, AUG 31 20229:44 PM EDT
Kif Leswing
@KIFLESWING


Nvidia shares fell 6.5% in extended trading on Wednesday after the company said the U.S. government is restricting sales in China.

In a filing with the SEC, Nvidia said the U.S. government told the company on Aug. 26, about a new license requirement for future exports to China, including Hong Kong, to reduce the risk that the products may be used by the Chinese military.

Nvidia said the restriction would affect the A100 and H100 products, which are graphics processing units sold to businesses.

“The license requirement also includes any future Nvidia integrated circuit achieving both peak performance and chip-to-chip I/O performance equal to or greater than thresholds that are roughly equivalent to the A100, as well as any system that includes those circuits,” the filing said.

The company expects that it could lose $400 million in potential sales in China in the current quarter after previously forecasting revenue of $5.9 billion. The new rule also applies to sales to Russia, but Nvidia said it doesn’t have paying customers there.

In recent years, the U.S. government has applied increasing export restrictions to chips made with U.S. technology because of fears that Chinese companies could use them for military purposes or steal trade secrets.

Nvidia said it was applying for a license to continue some Chinese exports but doesn’t know whether the U.S. government will grant an exemption.

“We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren’t sufficient,” an Nvidia spokesperson told CNBC. “The only current products that the new licensing requirement applies to are A100, H100 and systems such as DGX that include them.”

An AMD representative confirmed to CNBC that it had also received new licensing requirements from the U.S. Department of Commerce which it believed applied to its MI250 circuit, which is intended for artificial intellegence. AMD said it did not believe the new requirements would cause a material impact to its business.

In a statement to CNBC, a department spokesperson said “While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests.”
 
It seems to be shaping up for those still 'holding the line' for lower GPU prices could enjoy a nice Black Friday.

Hopefully the energy price spike some people will experience this winter does not further create more demand destruction with this next round of GPUs using > 500 watts LOL.

There will most likely be a market shift to focus on low power consumption as Green policies and war continue to decimate "affordable" energy for alot of people.

Holding the line with no line on the horizon will have unforeseen results. Invest accordingly.
 
Last edited:
It seems to be shaping up for those still 'holding the line' for lower GPU prices could enjoy a nice Black Friday.

Hopefully the energy price spike some people will experience this winter does not further create more demand destruction with this next round of GPUs using > 500 watts LOL.

There will most likely be a market shift to focus on low power consumption as Green policies and war continue to decimate "affordable" energy for alot of people.

Holding the line with no line on the horizon will have unforeseen results. Invest accordingly.


Hope springs eternal for a reasonably priced next gen.

Between this China export restriction, Crypto being down (and hopefully not coming back up before next gen launch) and Nvidia being stuck with TSMC production capacity they can't get rid of, I am hopeful we will se a generation that is kind to the consumer.

No guarantees though, as circumstances always seem to conspire to screw over the consumer, especially in GPU's.
 
Kinda ironic since the cards are Made in China but maybe we won't see a shortage this time around.
 


Rival Advanced Micro Devices Inc (AMD.O) was also asked on Wednesday to stop AI chip exports to China.

So not just Nvidia but newer AI GPUs all around

Wonder if Intel was asked not to sell their GPUs to them too heh.....

They're allowed to keep fulfilling contracts for existing gen products (and Hopper as in the article edit: to complete development of Hopper, my mistake) but nothing newer from what I read
 
Last edited:
Well, the ban only affects the sale of the H100 and A100 cards, and AMD is hit with a similar ban meaning they can't sell the MI250 but they can still sell the MI100s, AMD is down 3.7% as a result of this ban as well.
 
I would assume Nvidia is not responsible or culpable if they sell to a 3rd party, location without this restriction who then sells to China. For example Nvidia sells to India which then sells to China.

In addition, China could also make products which are not able to be sold in China then cannot be manufactured in China.
 
I would assume Nvidia is not responsible or culpable if they sell to a 3rd party, location without this restriction who then sells to China. For example Nvidia sells to India which then sells to China.
Its all wrapped into export/sanction laws, you still get in trouble for it
 
Hope springs eternal for a reasonably priced next gen.

Between this China export restriction, Crypto being down (and hopefully not coming back up before next gen launch) and Nvidia being stuck with TSMC production capacity they can't get rid of, I am hopeful we will se a generation that is kind to the consumer.

No guarantees though, as circumstances always seem to conspire to screw over the consumer, especially in GPU's.

Problem is that it is highly likely China will take Taiwan by end of this decade. Stuff like TSMC will become their own, and the US won't be able to do anything to stop it.

US & EU needs to get chip fabs up and running in country fast, or we're fucked.
 
Problem is that it is highly likely China will take Taiwan by end of this decade. Stuff like TSMC will become their own, and the US won't be able to do anything to stop it.

US & EU needs to get chip fabs up and running in country fast, or we're fucked.
Every war game they have run on the scenario shows China taking Taiwan in 4-7 days with the US, EU, NATO, or whoever ran the scenario being completely unable to do anything about it other than destroying Taiwan's infrastructure in the process of trying. So yeah they arent gonna do squat other than some half-assed sanctions after the fact. So they have 7-10 years to drop some $10T into tech infrastructure spending to pull out of the area.
 
Well, Nvidia has been on a downward slide for the last year. They peaked in Nov 2021, and it's been a pretty steady slide down since then. AMD looks about the same, July Nvidia was at its lowest point in a long time it went up briefly after that but it's continuing its steady decline, if she sold in Aug I would be looking at this suspiciously as they had a significant bump there but she didn't.
 
Problem is that it is highly likely China will take Taiwan by end of this decade. Stuff like TSMC will become their own, and the US won't be able to do anything to stop it.

US & EU needs to get chip fabs up and running in country fast, or we're fucked.
I don't know about that since China is two steps away from having its economy collapse. Though I say this while America is like 5 steps away, and Europe is like 3 steps away. When Pelosi visited Taiwan for no reason and China banged their military chest to scare her off, it shows that China has no real power. China has a housing bubble issue, and COVID is still kicking their ass. Many countries are pushing to have chips made in their respective countries. If China isn't careful they could end up back in the stone ages.
 
I don't know about that since China is two steps away from having its economy collapse. Though I say this while America is like 5 steps away, and Europe is like 3 steps away. When Pelosi visited Taiwan for no reason and China banged their military chest to scare her off, it shows that China has no real power. China has a housing bubble issue, and COVID is still kicking their ass. Many countries are pushing to have chips made in their respective countries. If China isn't careful they could end up back in the stone ages.
Even more reason why they’d go kinetic and take Taiwan.
 
Even more reason why they’d go kinetic and take Taiwan.
If China does that then whatever economic advantage Taiwan has would be had. That's the only reason why China hasn't taken Taiwan, because the moment they do, all foreign investors will pull out fast. That's why China is instead doing this game where nobody is allowed to call Taiwan a country, because they rather take Taiwan through propaganda than by force. You can't expect China to take Taiwan and then expect companies like Nvidia to continue to operate there.
 
If China does that then whatever economic advantage Taiwan has would be had. That's the only reason why China hasn't taken Taiwan, because the moment they do, all foreign investors will pull out fast. That's why China is instead doing this game where nobody is allowed to call Taiwan a country, because they rather take Taiwan through propaganda than by force. You can't expect China to take Taiwan and then expect companies like Nvidia to continue to operate there.
If the Chinese economy collapses they’ll fall back on just going full communist, and they’ll take the chip fabs along with expertise of the workers of Taiwan with them. They aren’t going to sit there. Either way, every solid prediction is they will take Taiwan by end of the decade.
 
If the Chinese economy collapses they’ll fall back on just going full communist, and they’ll take the chip fabs along with expertise of the workers of Taiwan with them. They aren’t going to sit there. Either way, every solid prediction is they will take Taiwan by end of the decade.
If China collapses, then America and Europe collapses with them. Our economies are so interconnected that nothing is allowed to collapse without other economies also collapsing with them. Ukraine for example for all intents and purposes doesn't exist, and it immediately had a massive effect on the world economy. China would absolutely take over the chip fabs there, and hold the world hostage. Which is probably why everyone is now building their own chip fabs. Manufacturing has gotten to the point where exploiting human labor is not as needed as it used to. Which means bringing chip fabs to places like North America and Europe is financially viable. But we can't just build a fab and flip it on within a few years. It'll take a while, which means we gotta play nice to China.
 
Bah, for 6.5% Nvidia won't give a flying f**k, they enjoyed far fatter revenues last year. Bloomberg said 15 billion USD was pumped in the GPU market the previous year. In the end, the only winners of the mining craze were the credit card companies considering how many sealed 3090s I have seen thrown on the market for sale after the crypto crash, for less than the acquisition price. And what's worse, China already has its own in-house AI GPU already, the Biren GPU, AND its own CPU for the domestic market, with performance rivaling Zen 3 and Alder Lake, so the move seems a bit moot.
 
Ukraine for example for all intents and purposes doesn't exist, and it immediately had a massive effect on the world economy.

What do you mean “doesn’t exist”? Ukraine is a major supplier of a lot of raw material, particularly agriculture and, in the case of the tech industry, between Odessa and Mariupol, supplied a little over half of the world’s supply of neon gas pre-war, which is an essential ingredient for lithography. Ukraine isn’t as wealthy as a lot of other countries, but they are still a major player in a few key areas, and knocking them offline will have a huge impact.
 
If China does that then whatever economic advantage Taiwan has would be had. That's the only reason why China hasn't taken Taiwan, because the moment they do, all foreign investors will pull out fast. That's why China is instead doing this game where nobody is allowed to call Taiwan a country, because they rather take Taiwan through propaganda than by force. You can't expect China to take Taiwan and then expect companies like Nvidia to continue to operate there.

I disagree. China hasn’t taken Taiwan yet for one simple reason; they haven’t been able to. As a matter of fact, Eisenhower threatened to go nuclear against China in the 50s in defense of Taiwan, and the US is still militarily supporting Taiwan to this day. Given the fact that Taiwan is supplying strategic resources in the form of silicon microchips, it’s likely China isn’t sure how fast the US is willing to go to defend Taiwan and doesn’t want to risk a military engagement against the US. The propaganda route is, therefore, way easier and far less risky for China.

The fact that China shot its own sector in the foot demonstrates conclusively that foreign investment takes a back seat to whatever the party wants, but it also demonstrates that they know foreign investment coming regardless of what they do. Foreign companies want access to China’s market so badly, that literally everything else takes a back seat in their quest to gain it. If China invades Taiwan, we all know the response from foreign companies will be something along the lines of “well we all know there is only one China, please keep buying our stuff”.
 
Everyone knows China isn't going anywhere because their entire economy - if not their entire existence - is built on selling cheap iPhone cases on Amazon. And as long as Apple's still charging $59 for firstparty, China lives on another day.

1662257633553.png
 
Last edited:
Back
Top