new chip problems may affect shares of certain chip customers, such as e.g
(ticker: NVDA) told investors Wednesday in a filing with the Securities and Exchange Commission that the U.S. government had imposed new licensing requirements on some of its advanced chips. It 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 filing.
Nvidia added that it does not sell to customers in Russia, but $400 million in third-quarter sales to China could be affected. Wall Street is currently projecting $5.9 billion in third-quarter sales for the company.
Nvidia added Thursday in another SEC filing that the government had allowed the development of some chips to go ahead, as well as chip sales through Hong Kong through September 2023. Still, there will remain concerns for investors about the sale of Chinese chips for the entire industry in the coming months.
Nvidia shares fell 7.7% in Thursday trading while
rose 0.3 percent. The
fell 0.3 percent.
( TSLA ) stock fell as much as 3.4% in Thursday trading before rallying late in the day. Shares closed up 0.6% at $277.16. Some older Teslas used Nvidia hardware, but Tesla seems to have moved away from Nvidia as a chip hardware supplier in recent years.
Tesla did not immediately respond to a request for comment about any Nvidia products used.
The only Nvidia influence isn’t really the point. America’s limited chip sales to China could spread to other companies. And restrictions could eventually disrupt operations in a number of industries, including automobiles.
Advanced Micro Devices
( AMD ) stock fell 3% Thursday. The company is facing similar problems as Nvidia.
(9984.Japan), which owns chipmaker ARM, fell 0.9% in overseas trading.
That’s what a spokesperson for Nvidia says Barron’s in an email Wednesday: “We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements are not sufficient. The only current products to which the new license requirement applies are the A100, H100 and systems such as the DGX that include them.”
Nvidia did not immediately respond to a request Thursday for comment on the potential impact on Tesla or other auto customers.
The chip hiccup is another supply chain problem for an industry that has had a number of supply chain problems. Auto companies have been dealing with semiconductor shortages along with parts shortages and lost production due to Covid for many, many months.
And for Tesla’s Shanghai operations, production and spare parts supply have recently been threatened by a drought in Sichuan province that cut hydropower supplies to industrial customers in the region.
(TM) and battery manufacturer
Contemporary Amperex Technology Co Ltd
(300750.China) was forced to take plant downtime due to the problem.
Aside from supply issues, demand issues could also hit Tesla stock on Thursday. August delivery figures from Chinese electric car manufacturers
(LI) were reported on Thursday and they were not good. The three combined for 24,826 deliveries in the month. It is the second consecutive monthly decline and the lowest figure since the three delivered 18,243 in April amid China’s recent Covid lockdowns.
and Li shares fell 5.8%, 6.5% and 3% respectively on Thursday.
Tesla produced around 77,000 cars in China in August, according to the China Passenger Car Association. That would be the second-highest monthly output for the Shanghai plant. But this figure also includes vehicles intended for export. The NIO, XPeng and Li figures are primarily Chinese domestic sales.
Write to Al Root at firstname.lastname@example.org