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China’s electric automobile corporations are secure from the U.S. Nvidia chip ban


Nvidia has found success in China by selling automotive chips to the country’s electric automobile corporations. However the U.S. semiconductor giant has been restricted from sending some products to China. Up to now, electric vehicle makers don’t appear to be affected.

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BEIJING — U.S. restrictions on Nvidia chip sales to China won’t affect Chinese electric automobile corporations, as they’re using auto systems that do not include the sanctioned products.

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

In China, the Nvidia Drive Orin chip has grow to be a core part of electrical automakers’ assisted driving tech. These semi-autonomous driving systems are a vital selling point for the businesses in what has grow to be a fiercely competitive market in China. Some automakers are also using Nvidia’s Xavier chip. Automotive is a comparatively small but fast-growing a part of Nvidia’s business.

Nonetheless, the brand new U.S. restrictions goal Nvidia’s A100 and H100 products — and these chips’ sales are a part of the corporate’s far larger data center business. The products are graphics processors that may be used for artificial intelligence.

“There should not be any restrictions on Xavier and Orin, and Xpeng, Nio and others would proceed to ship with those chips,” said Bevin Jacob, partner at Shanghai-based investment and consulting firm Automobility.

Jacob, nevertheless, did warn that there might be “close scrutiny” in the long run on U.S. firms shipping chips regarding artificial intelligence and autonomous driving to China.

Xpeng declined to comment. Nio, Li Auto, Huawei and Jidu — a recent electric vehicle brand backed by Baidu and Geely — didn’t reply to requests for comment.

The brand new U.S. rules are designed to reduce the danger of supporting the Chinese military, based on the U.S. government, Nvidia said in its filing with the Securities and Exchange Commission on Wednesday. Nevertheless it’s unclear what prompted this specific policy move or what could drive future ones.

In one other positive sign for the chipmaker, the U.S. will allow Nvidia to proceed developing its H100 artificial intelligence chip in China, the corporate said Thursday.

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

The corporate said second-quarter revenue for its automotive business 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 said in an earnings call in late August, based on a StreetAccount transcript.

WeRide, an autonomous driving technology start-up, said in a press release that “there is no such thing as a immediate impact from the ban.”

“We consider each the availability and demand side within the industry will work closely together to handle the consistently changing business environment to safeguard the continual development of technology,” the corporate said in a press release to CNBC.

Pony.ai, one other autonomous driving start-up, said it is just not affected, as did automaker Geely.

— CNBC’s Kif Leswing contributed to this report.

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