To The Moon

Yesterday, the shares of $NVIDIA Corp(NVDA)$, the king of GPU, once plunged nearly 8%.

On the news, the United States announced that the ban on chips in China had been upgraded, and the H100 and H800 series GPU for China had been added to the restrictions. Investors were worried that the Sino-US chip war would affect Nvidia's performance.

But don't worry, Nvidia is not afraid of the escalating chip export curbs in the United States！

On the surface, Nvidia's revenue from China accounts for as much as 20%, but the company has a lot of ways to mitigate the impact of the ban.

First, Nvidia sells not only data center GPU to China, but also games and car chips, and the combined revenue of the latter two is similar to that of data centers:

Second, Nvidia can bypass the ban by introducing a replacement version of the H100, just as it did after the ban on the A100.

Finally, although the ban is upgraded, it does not limit Chinese enterprises to rent cloud services to obtain advanced GPU, so the demand of Chinese manufacturers may be transferred to overseas cloud service manufacturers, and Nvidia's GPU will not be affected in the end.

The chip war between China and the United States is intensifying, but it is essentially around advanced chips, and mature processes will not be included in the range of banned sales.

In the future, as Nvidia GPU continues to upgrade, H100 will become a "backward process". It is expected that the United States will issue a license to Nvidia. When Chinese companies are unable to launch similar performance GPU, Nvidia products will not be worried about selling at all.

Considering that the most advanced GPU will be manufactured with processes of 5nm or less, and at present, the United States, the Netherlands and Japan, have banned all the most advanced semiconductor equipment and raw materials, Chinese enterprises have broken through the tight encirclement and there is little chance of developing a GPU comparable to the H100 series.

Nvidia does not need to worry about the obvious damage to the performance caused by the chip war between China and the United States in the next 10 years.

Nvidia's only risk is that AI applications are not as expected, reducing the demand for downstream manufacturers to purchase GPU. At present, the market is worried about the sustainability of the outbreak of results in the first half of the year, and Nvidia needs to disclose more information in the next quarter's results.

Before that, Nvidia may be greatly affected by the news side, but in the long run, Nvidia will fully benefit from the era of AI.