The government “stated that the new license requirement would address the risk that covered products would be used or diverted to a ‘military end use’ or ‘military end user’ in China and Russia,” the filing reads in part.
Nvidia added that it does not sell to customers in Russia, but the $400 million in third-quarter sales destined for China could be affected. Wall Street is currently projecting $5.9 billion in third-quarter sales for the company.
Nvidia added on Thursday in another SEC filing that the government had allowed development of some chips as well as chip sales through Hong Kong to proceed until September 2023. However, concerns will remain for investors about Chinese chip sales for the entire industry in the coming months.
Nvidia stock fell 7.7% in Thursday trading, while the
S&P 500
rose 0.3%. The
Nasdaq Composite
fell 0.3%.
Tesla
Its ( TSLA ) stock fell as much as 3.4% in Thursday trading before rallying late in the day. Shares closed up 0.6% at $277.16. Some earlier Teslas used Nvidia hardware, but Tesla seems to have moved away from Nvidia as a chip supplier in recent years.
Tesla did not immediately respond to a request for comment about any Nvidia products used.
However, the Nvidia-only impact isn’t really the point. The curb on U.S. chip sales to China could spread to other companies. And the restrictions could eventually disrupt operations in a number of industries, including autos.
sophisticated micro devices
( AMD ) shares fell 3% on Thursday. The company faces similar problems to Nvidia.
Softbank
(9984.Japan), which owns chip maker ARM, fell 0.9 percent in overseas trading.
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 seek licenses where replacements are insufficient. The only current products subject to the new licensing requirement are the A100, H100 and systems such as the DGX that include them.”
Nvidia did not immediately respond to a request Thursday for comment on any potential impact on Tesla or other auto customers.
The chip hiccup is another supply chain problem for an industry that has had a number of supply chain problems. Auto companies have faced semiconductor shortages along with parts shortages and lost production due to Covid for many, many months.
And for Tesla’s Shanghai operation, production and parts supply were recently threatened by a drought in Sichuan province, which cut off hydropower to industrial customers in the region.
Toyota Motor
(TM) and batteries
Contemporary Amperex Technology Co Ltd
(300750.China) were forced to shut down facilities due to the issue.
In addition to supply woes, demand issues may also hit Tesla stock on Thursday. August delivery data from Chinese EV manufacturers
NIO
(
NIO
),
XPeng
(XPEV) and
Li Auto
(LI) reported on Thursday and were not outstanding. The three together for 24,826 deliveries during the month. This is the second straight monthly decline and the lowest number since the trio delivered 18,243 in April amid recent Covid restrictions in China.
NIO,
XPeng
and Li shares fell 5.8%, 6.5% and 3%, respectively, on 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 figure also includes vehicles intended for export. NIO, XPeng and Li numbers are mainly Chinese domestic sales.
Write to Al Root at allen.root@dowjones.com
