Shares in major chipmakers Nvidia and AMD fell amid concerns over new US restrictions on sales of artificial intelligence chips to China.
According to Nvidia, the US government is requiring a new license effective immediately to address the risk of chips being “used or diverted to a ‘military end-use’ in China and Russia.”
There are fears the rule could result in millions of dollars in lost revenue.
Both chipmakers’ shares slipped in after-hours trading in New York.
Nvidia’s shares fell 6.6%, while AMD’s fell 3.7%.
The new restrictions are a “stomach punch for Nvidia,” Wedbush Securities’ Dan Ives told the BBC.
The US Department of Commerce told the BBC it was “not in a position to outline specific policy changes at this time”.
- The US is trying to take on China with huge technology investments
- Why is there a chip shortage?
“We are taking a comprehensive approach to implement additional technology, end-use and end-user measures needed to protect U.S. national security and foreign policy interests,” a Commerce Department spokesman said.
“This includes preventing China’s acquisition and use of US technology related to its military-civilian fusion program to advance its military modernization efforts, commit human rights abuses and enable other malicious activities,” the spokesman added.
In a US regulatory filing on Wednesday, Nvidia said the “new license requirement” would affect exports of its A100 and H100 chips, which are designed to accelerate machine learning tasks, and the systems that contain them.
About $400 million (£345.2 million) in sales to China could be hit, Nvidia added, “if customers don’t want to buy the company’s alternative product offerings or if the[US government]doesn’t issue licenses or licenses in a timely manner.” denied to significant customers”.
An Nvidia spokesman told the BBC it is in contact with customers in China “to satisfy their planned or future purchases of alternative products”.
Meanwhile, an AMD spokesman said the rules, which would prevent its MI250 chips from shipping to China, are unlikely to have a “material impact” on the business.
Both Nvidia and AMD halted sales to Russia after February’s invasion of Ukraine.
Analysts said US requirements could make it harder for China to acquire chips for advanced computers.
It could also impact the earnings of U.S. manufacturers like Nvidia and AMD, said Mario Morales, a California-based analyst at market research firm IDC.
“Both companies have significant exposure to China and could see further repercussions going forward, particularly if China decides to retaliate,” Mr Morales said.
Last week, Nvidia reported second-quarter revenue of $6.7 billion, well below guidance.
However, revenue from the data center business, which makes computer chips, was up 61% year over year.
“This is really a shot across the bow to China and will really fan those flames in terms of geopolitical (tensions). Nvidia has been caught in the crossfire,” Mr. Ives said.
US and China and are locked in a longstanding dispute over trade and technology.
Tensions between the world’s two largest economies rose earlier this month after US politician Nancy Pelosi paid a controversial visit to Taiwan.
China regards the self-governing island as part of its territory and insists it should be united with the mainland by force if necessary.
Add Comment