On October 18, Beijing time, after the U.S. Biden administration announced on Tuesday that it would tighten exports of specific high-end chip technologies to countries such as China, artificial intelligence chip giant Nvidia said,The new rules could force companies to move some operations out of countries affected by export restrictions.
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After the United States expanded its chip export control regulations, Nvidia once downplayed its impact. "We comply with all applicable regulations while working hard to provide thousands of application products that support different industries. Given the global demand for our products, we do not expect the new regulations to have a material impact on our financial results in the short term." Nvidia said.
However, Nvidia later responded further saying,The new regulations may impact the Company's ability to develop and deliver certain products, including completing the development of certain products on time, supporting existing customers of those products, or supplying those products to customers outside of the affected regions. A senior U.S. official said the new rules will affect Nvidia's chip exports to China.
Bloomberg Intelligence analysts said updates to these rules were expected, but Nvidia may see impacts in the future. "While these restrictions will not have a large impact on Nvidia's short-term expectations, they may weaken Nvidia's long-term prospects. The recent surge in orders from large Chinese customers suggests that Chinese companies are increasing inventories of 800 series chips in anticipation of such restrictions, thus driving Nvidia sales." Bloomberg Intelligence analyst Kunjan Sobhani said.
Affected by new U.S. export control regulations, Nvidia's stock price fell as much as 7.8% on Tuesday, the largest intraday drop since December last year. As of Tuesday's close, Nvidia's stock price fell 4.68%, and its market value evaporated by US$53.3 billion (approximately 389.8 billion yuan).