NVIDIA has a rope for export control in China – balancing compliance, profits and staying competitive. On Wednesday night, on a revenue call for chipmakers, CEO Jensen Huang noted that China’s revenue has dropped to half of the previous pre-export control level. From a perspective: We are still talking about $17 billion, according to NVIDIA’s annual report. That’s 13% of total revenue, which would be important if faster U.S. export restrictions are about to come into play. The export-compliant H20 chip is NVIDIA’s lifeline in China, generating an estimated $12 billion to $15 billion in 2024 and giving the company some insight into the market right now. Chinese customers have been eager to buy these chips, especially since DeepSeek began to attract global attention. If these chips are banned, NVIDIA could lose billions of dollars in annual revenue from China. Of course, their global dominance and the new Blackwell line will defend the blow, but the real problem will be China’s reaction. Will they continue to purchase “cuts” of these Nvidia chips that are in line with imports and exports, or will they double the replacement of domestic alternatives? Huang warned that competition in China is growing, and in the second year, NVIDIA listed Huawei as a competitor in its 10K filing with the U.S. Securities and Exchange Commission. NVDA YTD Mountain Nvidia stock so far. A silver lining? NVIDIA’s share price may have been factored in further U.S. government export controls. Stocks fell more than 5% in trading Thursday afternoon, bringing the year-end to nearly 8%. Jordan Klein of the Rayam tribe said the stock was already “dangerous”, while Citi suggested Chinese restrictions, semiconductor tariffs and NVIDIA’s gross margin could limit the stock range for a while. It is becoming increasingly clear that this is not just a short-term revenue blow. Around the time when domestic competitors are gradually developing, NVIDIA may lose its foothold in the world’s largest semiconductor market. The real long-term risk not only loses today’s Chinese income, but also misses tomorrow’s growth story in a market that is rapidly developing its own AI chip ecosystem.
As NVIDIA keeps relevant in China, sales go beyond that | Real Time Headlines
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