Nvidia's Key Market China Wants To Beat US Embargo, Boosts Chipmaking Machinery Imports by 14%
Portfolio Pulse from Anusuya Lahiri
China's imports of chipmaking machinery surged by 14% in 2023, reaching nearly $40 billion, in an effort to counter U.S. export controls and boost its semiconductor industry. Nvidia Corp (NVDA) dominates China's AI chip market, but U.S. sanctions and Chinese efforts to develop a domestic chip ecosystem are challenging its position. China's $40 billion state fund aims to support local chip manufacturing, while companies like Baidu (BIDU) and Alibaba (BABA) may reduce Nvidia chip orders. ASML Holding (ASML) halted shipments of high-end machines to China, and Advanced Micro Devices (AMD) is also affected by the embargo.
January 22, 2024 | 1:23 pm
News sentiment analysis
Sort by:
Descending
NEUTRAL IMPACT
Alibaba Group Holding Limited may significantly reduce orders for Nvidia chips, which could impact Nvidia's sales and Alibaba's procurement strategy.
Alibaba's intention to reduce Nvidia chip orders is part of China's broader move to decrease reliance on U.S. technology, which may have a neutral impact on Alibaba's stock but a negative impact on Nvidia's.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Baidu Inc chose Huawei Technologies over Nvidia for a large AI chip order, indicating a shift away from U.S. suppliers that could affect Nvidia's revenue.
Baidu's decision to go with Huawei Technologies for an AI chip order instead of Nvidia reflects the changing dynamics in chip sourcing due to U.S. sanctions, which could impact Nvidia's revenue.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Tencent Holding Ltd's reported intention to reduce Nvidia chip orders as part of China's move to cut reliance on U.S. tech could impact Nvidia's sales.
Tencent's reported plans to reduce Nvidia chip orders are indicative of the broader trend of Chinese companies seeking to diversify away from U.S. technology suppliers.
CONFIDENCE 60
IMPORTANCE 40
RELEVANCE 50
NEGATIVE IMPACT
Advanced Micro Devices is impacted by the U.S. embargo on China, which could affect its sales as China seeks to establish a self-reliant semiconductor industry.
The U.S. embargo on advanced AI chips, including those from AMD, may lead to reduced sales in China as the country invests in its own chip industry.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
ASML Holding stopped shipments of some high-end chipmaking machines to China following U.S. government requests, impacting its sales in the Chinese market.
ASML's compliance with U.S. government requests to halt shipments of advanced equipment to China could negatively affect its business in the Chinese market.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Nvidia, with a 90% share in China's $7 billion AI chip market, faces potential revenue loss as Chinese companies aim to reduce dependence on its chips due to U.S. sanctions.
Nvidia's significant market share in China's AI chip market is threatened by the U.S. sanctions and China's push for semiconductor self-sufficiency, which could lead to a decrease in orders from Chinese companies.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90