Tag: chip

Nvidia Close to Becoming First Trillion-Dollar Chip Firm as AI Boom Drives Stellar Forecast

For Nvidia, the boom in generative artificial intelligence (AI) is everything, everywhere, all at once.

The chip designer’s shares extended their rally this year on Thursday, soaring 25 percent after a stellar forecast showed that Wall Street has yet to price in the AI potential of the company that has already doubled in value in 2023.

Nvidia, whose stock hit an all-time high in premarket trading, was set to swell its market valuation by about $189 billion (roughly Rs. 15,63,914 crore) to $945 billion (roughly Rs. 78,19,572 crore).

The rosy earnings also sparked a rally in the chip sector and AI-focused firms, lifting stock markets from Japan to Europe. In the US, companies including Alphabet, Microsoft and AMD rose between 2 percent and 8 percent.

Analysts rushed to raise their price targets on Nvidia stock, with 21 lifting their view on the idea that all roads in AI lead to the company as it provides the chips used to power ChatGPT and many similar services.

“In the 15+ years we have been doing this job, we have never seen a guide like the one Nvidia just put up with the second-quarter outlook that was by all accounts cosmological, and which annihilated expectations,” said Stacy Rasgon of Bernstein.

Nvidia, the fifth-most valuable US company, on Wednesday projected quarterly revenue more than 50 percent above Wall Street estimates and said it would have more supply of AI chips in the second half to meet a surge in demand.

CEO Jensen Huang said a $1 trillion (roughly Rs. 82,74,230 crore) worth of current equipment in data centers would have to be replaced with AI chips, as generative AI is applied into every product and service.

The results bode well for Big Tech companies, which have shifted focus to AI in hopes the technology would help attract demand at a time their profit engines of digital advertising and cloud computing are under pressure from a weak economy.

“This Nvidia (forecast) changes the whole narrative around AI and demand looking ahead in the enterprise. Historical inflection point possibly in AI Revolution, with Nvidia the key barometer,” said Dan Ives of Wedbush.

© Thomson Reuters 2023

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China Chip Imports Drop 12.4 Percent YoY in September, States Government Data

China’s chip imports fell 12.4 percent in September, according to official customs data published on Monday, continuing a decline amid tensions with the United States and an ongoing chip shortage.

The country imported 47.6 billion chip units during the month, compared with 54.3 billion units in September 2021, according to the data, which had been due for release earlier this month but was delayed due to the Communist Party Congress.

That maintains an ongoing downward trend for chip imports.

In the first nine months of 2021, China imported 417.1 billion units of chips, down 12.8 percent year-on-year.

Chip imports to China surged in 2021, as tensions between the US and China over technology policy escalated and a global chip shortage caused many companies in China to stockpile supplies.

Separate data from the National Bureau of Statistics showed that domestic chip output in September fell 16.4 percent year-on-year to 26.1 billion units. In the first nine months of 2022, total output fell 10.8 percent to 245 billion units.

Achieving self sufficiency for China’s chip industry remains a key policy priority for Beijing, especially as Washington continues to target the progress of China’s semiconductor sector, with the latest being a set of sanctions announced by the Biden administration earlier this month.

The sanctions have caused major overseas-based chip manufacturing equipment companies to cease supplying key Chinese chip companies, including Yangtze memory Technologies (YMTC) and Semiconductor Manufacturing International (SMIC), and makers of advanced artificial intelligence chips to cease supplying companies and laboratories.

In other news, Apple has put on hold plans to use memory chips from China’s Yangtze Memory Technologies (YMTC) in its products, after Washington imposed tighter export controls against Chinese technology companies, the Nikkei reported on Monday. Apple had originally planned to start using state-funded YMTC’s NAND flash memory chips as early as this year, Nikkei said, citing people familiar with the matter. The chips were initially planned to be used only for iPhone models sold in the Chinese market.

© Thomson Reuters 2022

 

 

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Elon Musk Says Tesla Could Lower Electric Vehicle Prices if Inflation Slows in Future

Tesla Chief Executive Officer Elon Musk said on Friday the electric automaker could lower prices for cars if inflation calms down.

Musk, who has over 100 million followers on Twitter, was replying to a tweet on Friday that asked if the company had any plans to lower prices that it had raised to beat the pandemic and supply chain woes.

“If inflation calms down, we can lower prices for cars,” Musk said in a tweet.

Tesla has raised car prices a number of times in the past few months by a few thousand dollars as costs of raw materials for aluminum to lithium used in cars and batteries surge, while automakers struggle to source chips and other supplies due to an industry-wide shortage.

Musk, the world’s richest person, in recent weeks warned about the risk of a recession and said he had a “super bad feeling” about the economy.

The US consumer prices jumped 9.1 percent to a nearly 41-year high in June, as gasoline and food costs remained elevated. The surge spells tough times for companies that are now looking to cut costs and alter their hiring plans.

Last month, Musk said that the electric vehicle maker’s total headcount will increase over the next 12 months, but the number of salaried staff should be little changed, backtracking from an email just two days ago saying that job cuts of 10 percent were needed.

“Total headcount will increase, but salaried should be fairly flat,” Musk tweeted in a reply to an unverified Twitter account that made a “prediction” that Tesla’s headcount would increase over the next 12 months.

Musk in an email to Tesla executives on Thursday, which was seen by Reuters on Friday, said he has a “super bad feeling” about the US economy and needed to cut jobs by about 10 percent.

© Thomson Reuters 2022

 



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Semiconductor Exports to Russia Said to Have Plunged by 90 Percent After Curbs Following Ukraine Invasion

Global exports of semiconductors to Russia have plummeted by 90 percent since the United States and allies slapped export controls on Moscow over its invasion of Ukraine, US Commerce Secretary Gina Raimondo said on Wednesday.

Raimondo, speaking at an annual Commerce Department conference, also said that controls placed on Russia’s aerospace sector were hammering its ability to generate revenue and support military aviation.

“Russia may be forced to ground between half and two-thirds of its commercial aircraft in the next four years in order to cannibalize them for spare parts,” she added.

The remarks came a day after US President Joe Biden’s administration added five companies in China to a trade blacklist on Tuesday for allegedly supporting Russia’s military and defense industrial base, flexing its muscle to enforce sanctions against Moscow.

The United States has worked with allies to punish Russian President Vladimir Putin for the invasion, which Moscow calls a “special operation”, by sanctioning a raft of Russian companies and oligarchs and adding others to a trade blacklist.

While US officials had previously said that China was generally complying with the restrictions, Washington has vowed to closely monitor compliance and rigorously enforce the regulations.

On Wednesday, Raimondo also doubled down on threats to “shut down” China’s top chipmaker SMIC if it is found to be supplying chips to Russia.

“What if SMIC or other Chinese-based semiconductor companies are found supplying chips to Russia?” she said. “We will shut them down and we can, because almost every chip in the world and in China is made using US equipment and software and I intend to make good on that commitment if it’s necessary.”

© Thomson Reuters 2022

 

 

 

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