new chip problem may affect the stock of some chip customers such as
(ticker: NVDA ) on Wednesday told investors in submission with the Securities and Exchange Commission that the US government has imposed new licensing requirements for some of its advanced chips. This will affect sales in Russia and China unless Nvidia gets a license to sell quickly.
The government “states that the new license requirement will address the risk that covered products will be used or diverted to a ‘military end use’ or ‘military end user’ in China and Russia,” part of the filing reads.
Nvidia added that it does not sell to customers in Russia, but $400 million in third-quarter sales destined for China could be affected. Wall Street is currently forecasting $5.9 billion in sales for the company in the third quarter.
Nvidia added Thursday at other SEC filing the government has allowed development of some chips to go ahead, as well as chip sales through Hong Kong until September 2023. Still, investor concerns about China’s industry-wide chip sales will remain in the coming months.
Shares of Nvidia fell more than 5% in premarket trading on Thursday. Shares pared some losses after the new SEC filing.
futures fell 0.7% and 1.1%, respectively.
( TSLA ) shares were down 1% in premarket trading as well. 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 on the Nvidia products used.
Nvidia’s impact alone isn’t really what’s important. The U.S. crackdown on chip sales in China could spread to other companies as well. And the restrictions could eventually disrupt operations in a number of industries, including autos.
Advanced Micro Devices
( AMD ) shares fell 3.6% in premarket trading. The company is facing similar problems as Nvidia.
(9984.Japan), which owns chip maker ARM, fell 0.9 percent in overseas trade.
An Nvidia spokesperson said 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 request licenses when replacement is not sufficient. The only current products subject to the new license requirement are the A100, H100 and systems such as the DGX that incorporate them.”
Nvidia did not immediately respond to a request Thursday for comment on any impact on Tesla or other auto customers.
The chip hiccups are another supply chain issue for an industry that has had multiple supply chain issues for what now feels like years. Auto companies are dealing with the shortage of semiconductors along with parts shortages and lost production to Covid for many, many months.
And for Tesla’s Shanghai operations, production and parts supplies were recently threatened by drought in Sichuan province that cut hydroelectric power supplies to industrial customers in the region.
(TM) and battery manufacturer
Modern Amperex Technology Co Ltd
(300750.China) were forced to shut down plant operations due to the problem.
In addition to supply issues, demand issues could also affect Tesla shares on Thursday. August delivery data from Chinese EV manufacturers
(LI) were reported on Thursday and they they weren’t great. The three combined for 24,826 deliveries during the month. This is the second straight monthly decline and the lowest number since the three delivered 18,243 in April amid China’s recent Covid lockdowns.
and Li shares fell roughly 2% in premarket trading Thursday.
Tesla produced about 77,000 vehicles in China in August, according to the China Automobile Association. This would be the second-highest monthly output for the Shanghai plant. But this number also includes cars destined for export. NIO, XPeng and Li’s numbers are mostly domestic sales in China.
Write to Al Root at email@example.com