Nvidia has achieved success in China by selling car chips to the country’s electric car companies. But the American semiconductor giant is not allowed to send certain products to China. So far, electric vehicle manufacturers don’t seem to be bothered by it.
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BEIJING — U.S. restrictions on the sale of Nvidia chips to China will not affect Chinese electric car companies as they use car systems that do not include the sanctioned products.
Shares of chipmaker Nvidia are down about 13% this week after the company announced new US restrictions on its exports to China, impacting about $400 million in potential sales in the current quarter.
In China, the Nvidia Drive Orin chip has become a core part of the driver assistance technology of electric car manufacturers. These semi-autonomous driving systems are a major selling point for the companies in what has become a fiercely competitive market in China. Some automakers also use Nvidia’s Xavier chip. Automotive is a relatively small but fast-growing part of Nvidia’s business.
However, the new US restrictions target Nvidia’s A100 and H100 products — and the sale of these chips is part of the company’s much larger data center business. The products are graphics processors that can be used for artificial intelligence.
“There should be no restrictions on Xavier and Orin, and Xpeng, Nio and others would continue to provide those chips,” said Bevin Jacob, partner at Shanghai-based investment and consulting firm Automobility.
However, Jacob warned that in the future there could be “close scrutiny” on US companies shipping chips related to artificial intelligence and autonomous driving to China.
Xpeng declined to comment. Nio, Li Auto, Huawei and Jidu – a new electric vehicle brand backed by Baidu and Geely – did not respond to requests for comment.
The new US rules are designed to reduce the risk of aiding the Chinese military, the US government said, Nvidia said in its filing with the Securities and Exchange Commission on Wednesday. But it’s unclear what prompted this particular policy move or what might drive future policy changes.
Another positive sign for the chipmaker is that the US will allow Nvidia to continue development of its H100 artificial intelligence chip in China, the company said Thursday.
“The U.S. government has authorized exports, re-exports and domestic transfers necessary to continue the development of H100 integrated circuits by NVIDIA Corporation or the company,” Nvidia said in a filing Thursday.
The company said second-quarter revenue for its auto business was $220 million, up 45% from a year earlier.
“Our auto revenues are changing and we expect this to be our next multi-billion dollar business,” Nvidia CEO Jensen Huang said in an earnings call in late August, according to a StreetAccount transcript.
WeRide, an autonomous driving start-up, said in a statement that “the ban will have no immediate effect”.
“We believe that both the demand and supply sides in the industry will work closely together to cope with the ever-changing business environment and ensure the continued development of technology,” the company said in a statement to CNBC.
Pony.ai, another autonomous-driving start-up, said it will not be affected, as will automaker Geely.
— CNBC’s Kif Leswing contributed to this report.