To The Moon

Opportunity or Crisis??

U.S. officials have banned the export of computing chips for artificial intelligence work to China. This is a huge news as it would definitely weaken the sales revenue of US semi-conductor companies in the upcoming quarters.

The ban on Nvidia's chip export to China affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with the completion of developing the H100 (Nvidia's flagship chip). The announcement signals a major escalation of the technology tensions between the United States and China. Without American chips from companies like $NVIDIA Corp(NVDA)$ and its rival $AMD(AMD)$ , Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used image and speech recognition, among many other tasks. Furthermore, US govt also want Dutch to ban $ASML Holding NV(ASML)$ from selling chip gear to China.

No doubt it will be a huge blow to current shareholders but is this just temporary or a permanent move?? I believe it will be similar to the scenario whereby there's potential delisting of China-listed stocks. There will be more pain moving forward in the short-term but I'm sure it's also a good opportunity to add more when the panic selling is over.

Using Nvidia as an example, the company mostly sells GPUs for the PC and workstation markets. But the growing application of these chips in new verticals such as data centers, automotive, cryptocurrency mining, and digital twins has unlocked a massive addressable market for Nvidia. Data centers have become a very important market for the company, as GPUs play a key role in accelerating diverse workloads related to artificial intelligence (AI), machine learning (ML), high-performance computing, and now the metaverse.

The automotive market is another area where the adoption of GPUs has unlocked a multibillion-dollar opportunity for Nvidia. The company has $11 billion worth of design wins in the automotive space that could turn into revenue over the next six years once manufacturers start deploying its chips into vehicles.

Meanwhile, Nvidia's GPUs are also being used to create digital twins, which are three-dimensional virtual representations of real-world objects. The likes of Kroger, PepsiCo, and Siemens have already partnered with Nvidia to improve the efficiency of their operations using digital twin simulations. It wouldn't be surprising to see more companies tapping Nvidia's digital twin platform in the future, as the adoption of this technology is expected to increase at an annual pace of 35% through 2027.

Overall, Nvidia has a potential total addressable opportunity worth $1 trillion in the long run across the multiple end markets that it is serving. Gaming is expected to produce just 10% of that opportunity, while the likes of automotive chips and data center chips, systems, and software could open a $600 billion market for the company in the future.

Another good example would be $Taiwan Semiconductor Manufacturing(TSM)$ , look at their Q3 results!! There's no sign of slowing down: the revenue and net profit is growing constantly quarterly but the stock performance is going down constantly?? Does it make sense?? You can see that most semiconductor stocks are constantly breaking new lows. As usual, do not enter while panic selling is still going on!! Only accumulate when the trend starts to reverse.

Be greedy when others are fearful!! Good luck dear tiger brothers and sisters!

@Daily_Discussion @CaptainTiger @TigerStars @MillionaireTiger