China’s electric car companies are safe from the U.S. Nvidia chip ban

Nvidia has discovered success in China by promoting automotive chips to the nation’s electric car companies. But the U.S. semiconductor big has been restricted from sending some merchandise to China. So far, electric automobile makers don’t appear to be affected.

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BEIJING — U.S. restrictions on Nvidia chip gross sales to China will not have an effect on Chinese electric car companies, as they’re utilizing auto techniques that do not embrace the sanctioned merchandise.

Chipmaker Nvidia’s shares have plunged round 13% this week after the firm disclosed new U.S. restrictions on its exports to China, affecting about $400 million in potential gross sales in the present quarter.

In China, the Nvidia Drive Orin chip has grow to be a core a part of electric automakers’ assisted driving tech. These semi-autonomous driving techniques are an vital promoting level for the companies in what has grow to be a fiercely aggressive market in China. Some automakers are additionally utilizing Nvidia’s Xavier chip. Automotive is a comparatively small however fast-growing a part of Nvidia’s enterprise.

However, the new U.S. restrictions goal Nvidia’s A100 and H100 merchandise — and these chips’ gross sales are a part of the firm’s far bigger information middle enterprise. The merchandise are graphics processors that can be utilized for synthetic intelligence.

“There shouldn’t be any restrictions on Xavier and Orin, and Xpeng, Nio and others would continue to ship with those chips,” mentioned Bevin Jacob, associate at Shanghai-based funding and consulting agency Automobility.

Jacob, nonetheless, did warn that there may very well be “close scrutiny” in the future on U.S. corporations transport chips regarding synthetic intelligence and autonomous driving to China.

Xpeng declined to remark. Nio, Li Auto, Huawei and Jidu — a brand new electric automobile model backed by Baidu and Geely — didn’t reply to requests for remark.

The new U.S. guidelines are designed to cut back the threat of supporting the Chinese army, in line with the U.S. authorities, Nvidia mentioned in its submitting with the Securities and Exchange Commission on Wednesday. But it is unclear what prompted this particular coverage transfer or what may drive future ones.

In one other optimistic signal for the chipmaker, the U.S. will permit Nvidia to proceed growing its H100 synthetic intelligence chip in China, the firm mentioned Thursday.

“The U.S. government has authorized exports, reexports, and in-country transfers needed to continue NVIDIA Corporation’s, or the Company’s, development of H100 integrated circuits,” Nvidia mentioned in a submitting Thursday.

The firm mentioned second-quarter income for its automotive enterprise was $220 million, up 45% from a 12 months earlier.

“Our automotive revenue is inflecting, and we expect it to be our next billion-dollar business,” Nvidia CEO Jensen Huang mentioned in an earnings name in late August, in line with a StreetAccount transcript.

WeExperience, an autonomous driving know-how start-up, mentioned in a press release that “there is no immediate impact from the ban.”

“We believe both the supply and demand side in the industry will work closely together to handle the constantly changing business environment to safeguard the continuous development of technology,” the firm mentioned in a press release to CNBC.

Pony.ai, one other autonomous driving start-up, mentioned it’s not affected, as did automaker Geely.

— CNBC’s Kif Leswing contributed to this report.

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