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Nvidia shares ended the week down nearly 15% after the California-based semiconductor maker got caught up in the US-China tech battle. American officials ordered the company to stop exporting two of its best computer chips to China.
But the US followed suit, giving the firm some breathing room – for now.
The chip manufacturer Nvidia is involved in the tech war between the USA and China. (Portal/Robert Galbraith/Portal)
Nvidia said in a filing with the Securities and Exchange Commission (SEC) on Wednesday that the U.S. informed the company last week of a new licensing requirement for its current highest-performing artificial intelligent chip, the A100, and its forthcoming next-generation AI chip have development, the H100.
The move effectively bans the company from exporting both chips to Chinese customers as the US seeks to limit the spread to China of technology that could be used to make weapons amid escalating tensions between the two nations.
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Nvidia said the licensing requirements could delay development of the H100, hamper its ability to ship A100s to customers and potentially force the company to move some of its operations out of China, where it is reporting $400 million in revenue for its third fiscal year. Dollar has forecast quarter to October.
The news caused Nvidia stock to fall.
| ticker | security | Last | change | change % |
|---|---|---|---|---|
| NVDA | NVIDIA CORP. | 136.47 | -2.90 | -2.08% |
Then on Thursday, the company filed an amended disclosure, which said the government had granted a certain grace period by agreeing to allow the exports needed to continue development of the H100 until March 1 next year, and Authorized Nvidia to continue all exports required to support US customers of the A100 through the same date.
The stock decline presented Cathie Wood with a buying opportunity. Ark Invest’s CEO and CIO sold shares of Tesla to buy Nvidia, Barron’s reported.
Jefferies analyst Mark Lipacis told Barron’s the sell-off was an “overreaction.” Needham analyst Rajvindra Gill disagreed, calling the license a “significant headwind” for the company.
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The US has also agreed to allow Nvidia to fulfill orders through its Hong Kong facility until September 1, 2023, meaning the company can also ship outside of China.
The Nvidia Corporation logo is seen during the annual Computex computer expo in Taipei, Taiwan May 30, 2017. (Portal/Tyrone Siu/File Photo / Portal Photos)
“We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses if replacements are not sufficient,” an Nvidia spokesman said in an emailed statement to FOX Business . “The only current products that will be subject to the new licensing requirement are the A100, H100 and systems like DGX that include them.”
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Ken Martina of FOX Business and Associated Press contributed to this report.