new chip issue may affect stocks of some chip customers, such as:
(ticker: NVDA) told investors in a filing with the Securities and Exchange Commission on Wednesday that the US government had imposed new licensing requirements on some of its advanced chips. That will affect sales to Russia and China, unless Nvidia gets a license to sell quickly.
The government “indicated that the new licensing requirement will address the risk that the covered products could be used in or diverted to a ‘military end-use’ or ‘military end-user’ in China and Russia,” read part of the application.
Nvidia added that it does not sell to customers in Russia, but $400 million in third-quarter sales destined for China could be impacted. Wall Street currently expects $5.9 billion in third-quarter revenue for the company.
Nvidia added in another SEC filing on Thursday that the government had allowed the development of a number of chips, as well as chip sales through Hong Kong until September 2023. Still, investors will continue to worry about China’s chip sales ahead of the coming months. whole industry.
Nvidia shares fell 7.7% in Thursday trading as the
rose 0.3%. The
(TSLA) shares fell as much as 3.4% in Thursday trading before rallying late in the day. Shares closed 0.6% higher at $277.16. Somewhat older Tesla used Nvidia hardware, but Tesla seems to have moved away from Nvidia as a supplier of chip hardware in recent years.
Tesla did not immediately respond to a request for comment about used Nvidia products.
The Nvidia-only impact isn’t really the point, though. The US restricting chip sales to China could expand to other companies. And restrictions can eventually disrupt operations in a number of industries, including automobiles.
(AMD) shares fell 3% Thursday. The company faces similar problems as Nvidia.
(9984.Japan), owner of chipmaker ARM, fell 0.9% in overseas trade.
An Nvidia spokesperson told Barron’s in an email Wednesday: “We work with our customers in China to satisfy their planned or future purchases with alternative products and can seek licenses when replacements are not enough. The only current products to which the new licensing requirement applies are A100, H100 and systems such as DGX that contain them.”
Nvidia did not immediately respond to a request for comment on Thursday about potential consequences for Tesla or other auto customers.
The chip hik is another supply chain problem for an industry that has had a myriad of supply chain issues. Automotive companies have faced semiconductor shortages, parts shortages and lost production due to Covid for many, many months.
And for Tesla’s Shanghai facility, parts production and supply were recently threatened by a drought in Sichuan province, which interrupted hydroelectric power plants to industrial customers in the region.
(TM) and battery maker
Contemporary Amperex Technology Co Ltd
(300750.China) were forced to shut down factories because of the problem.
Aside from supply issues, demand issues could also hit Tesla stock on Thursday. August delivery figures from Chinese EV makers
(LI) were reported on Thursday and they weren’t great. The three together accounted for 24,826 deliveries in the month. That’s the second consecutive monthly drop and the lowest number since the three delivered 18,243 in April amid recent Covid lockdowns in China.
and Li shares fell 5.8%, 6.5% and 3% respectively on Thursday.
Tesla produced about 77,000 vehicles in China in August, according to the Chinese Passenger Car Association. That would be the second highest monthly production for the Shanghai plant. But that number also includes vehicles destined for export. The NIO, XPeng and Li numbers are mainly Chinese domestic sales.
Write to Al Root at firstname.lastname@example.org