Tech war: Nvidia warns of sales hit in China from US chip curbs, as tailor-made products take time to develop
- The California-based company expects fourth-quarter sales to China and other US-restricted destinations to ‘decline significantly’
- While Nvidia is developing new processors for Chinese customers, those chips are not expected to ship until the year-end
US semiconductor giant Nvidia said on Wednesday it was developing new products for China-based customers, but the process would take time because of the need to formulate chips that meet those clients’ requirements without breaking Washington’s export rules.
“It’s a significant process to both design and develop these new products,” said Colette Kress, chief financial officer of Nvidia, during a post-earnings conference call with analysts late on Tuesday (US time). She added that the firm would stay focused on “finding the right balance” for its customers in China in view of the US chip restrictions.
Nvidia earlier this year joined an elite club of US companies with a valuation of more than US$1 trillion, thanks to a surge in demand for its semiconductors supporting artificial-intelligence (AI) systems.
The company’s third-quarter revenues soared 206 per cent year on year to US$18.12 billion, according to financial statements released on Tuesday.
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Accelerated AI adoption in industries worldwide pushed sales of the company’s data-centre business up by 279 per cent to US$14.51 billion, outperforming its headline revenue growth for the ninth straight quarter.
But headwinds are mounting for Nvidia in the China market, after the US government in October tightened regulations aimed at undercutting China’s AI development by blocking the country’s access to data-centre chips from the company.