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Production at Tesla’s Gigafactory in Shanghai could face another supply issue in the coming months.
Xiaolu Chu/Getty Images
Nvidia
it is
a new chip issue may impact the shares of some chip customers, such as
You’re here
.
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Nvidia
(ticker: NVDA) told investors in a filing with the Securities and Exchange Commission on Wednesday that the US government had imposed new licensing requirements on some of its advanced chips. This will impact sales in Russia and China unless Nvidia gets a license to sell soon.
The government “has indicated that the new licensing requirement will address the risk that covered products may be used or diverted to a ‘military end-use’ or ‘military end-user’ in China and Russia,” the filing reads. .
Nvidia added that it was not selling to customers in Russia, but $400 million in third-quarter sales to China could be affected. Wall Street currently forecasts $5.9 billion in third-quarter sales for the company.
Nvidia added in a separate SEC filing on Thursday that the government had allowed some chip development as well as chip sales through Hong Kong until September 2023. Still, concerns will remain for investors over chip sales. Chinese trends for the entire industry in the coming months.
Nvidia stock fell 7.7% in Thursday trading while the
S&P500
increased by 0.3%. The
Nasdaq Compound
fell 0.3%.
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(TSLA) fell 3.4% in Thursday trading before recovering late in the day. Shares closed up 0.6% at $277.16. 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-only impact isn’t really the point though. The United States limiting chip sales to China could spread to other companies. And the restrictions could potentially disrupt operations in a number of industries, including cars.
Advanced micro-systems
(AMD) fell 3% on Thursday. The company is facing similar issues as Nvidia.
Software bank
(9984.Japan), which owns chipmaker ARM, fell 0.9% in foreign trade.
An Nvidia spokesperson said Barrons in an email Wednesday: “We are working with our customers in China to satisfy their planned or future purchases with alternative products and may apply for licenses when replacements are not sufficient. The only current products to which the new license requirement applies are A100, H100 and systems such as DGX that include them.
Nvidia did not immediately respond to a Thursday request for comment on any potential impact on Tesla or other automotive customers.
The chip hiccup is another supply chain issue for an industry that has had a host of supply chain issues. Automakers have faced semiconductor shortages as well as parts shortages and lost production due to Covid for many, many months.
And for Tesla’s operation in Shanghai, production and parts supply were recently threatened by a drought in Sichuan province that cut off hydroelectric power to industrial customers in the region.
Toyota engine
(TM) and battery manufacturer
Contemporary Amperex Technology Co Ltd
(300750.China) were forced to shut down factories due to this issue.
Along with supply issues, demand issues could also hit Tesla stock on Thursday. August delivery figures from Chinese EV makers
NIO
(
NIO
),
XPeng
(XPEV) and
Li-Auto
(LI) were reported on Thursday and they weren’t great. The three combined for 24,826 deliveries during the month. It is the second consecutive monthly decline and the lowest number since the three delivered 18,243 in April amid China’s recent Covid shutdowns.
NIO,
XPeng
and Li fell 5.8%, 6.5% and 3%, respectively, on Thursday.
Tesla produced about 77,000 vehicles in China in August, according to the Chinese Passenger Car Association. It would be the second highest monthly production for the Shanghai plant. But this number also includes vehicles for export. NIO, XPeng and Li figures are mainly Chinese domestic sales.
Write to Al Root at [email protected]
