Since 2023, US technology stocks have been moving higher, with the Nasdaq index up nearly 20% during the year and the S&P 500 index also gaining nearly 8% during the year, of which more than 30% growth can be directly attributed to the mania of artificial intelligence technology.
Among many technology companies, NVIDIA is undoubtedly one of the biggest beneficiaries, after hours on Wednesday, NVIDIA released the first quarter of fiscal 2024 earnings, the report showed that the quarter ended April 30, 2023, revenue of $7.192 billion, down 13% from the same period last year, but higher than the market expectation of $6.52 billion.
Although the revenue has declined, compared with other chip companies in the United States, it has been an amazing positive financial report, so it stimulated its stock price, causing Nvidia to soar more than 24% in a single day on the 25th, increasing the market value of nearly $184 billion, setting the third largest single-day market value growth record in the history of American companies.
Now, NVIDIA ranks fifth among U.S. public companies by total market capitalization, just 4% away from the trillion-dollar market cap milestone. It should be known that Intel, known as the "king of the PC era", has a market value of only $114.2 billion, AMD has a market value of $193.807 billion, and Qualcomm, the king of mobile phone processors, has $115.878 billion.
The above three are known as the American chip troika. However, Nvidia's increase in just one day is almost the same as AMD's total market capitalization, and another Qualcomm plus Intel has grown in almost a day.
NVIDIA thanks to the big model of artificial intelligence
NVIDIA was founded in 1993 and is headquartered in Santa Clara, California, USA. Chinese-American Jensen Huang is the founder and CEO. It is a world-famous computer hardware and chip design company. Its main products include high-performance processors, graphics cards, artificial intelligence processors, embedded system boards, automotive computing platforms, etc.
NVIDIA focused on the field of graphics chips in its early years, achieved great success in the gaming market and computer vision, and has become the world's leading high-end graphics card supplier.
In recent years, NVIDIA has gradually turned to the field of artificial intelligence and deep learning. The company took the lead in launching the application of GPU (graphics processing unit) chips in artificial intelligence, and the high parallel computing power of GPU chips provides an efficient computing platform for the development of artificial intelligence, and has made major breakthroughs in the fields of voice and images. In 2016, the company released a new generation of artificial intelligence processor Tesla P100, and then launched Volta, Turing and other series of artificial intelligence processors, allowing the company to maintain a leading position in the field of artificial intelligence.
In autonomous driving and robotics, NVIDIA also provides a series of CPU and GPU computing platforms to support developers in designing and testing AI technologies, which are widely used in the field of artificial intelligence.
High-end chips are restricted from being exported to China
In September, U.S. government officials asked it to stop exporting two of the top computing chips for AI work to China, including Hong Kong, the A100 and the upcoming H100 chip, and imposed new licensing requirements for this, which took effect immediately.
The new license restrictions include NVIDIA DGX or all other systems containing the A100, H100 chip, and A100X. This license limit also includes any future achievable peak performance and chip-to-chip I/O performance, equal to or greater than NVIDIA chips roughly equivalent to the A100 threshold, and all systems incorporating these chips. This means that NVIDIA needs a license from the U.S. government to export these chips and corresponding systems to China.
Is there really no impact without the Chinese market?
Of course not! Take the aforementioned three carriages of the US chip, since the chip restriction, the performance of the above three chip companies has been thunderous, the first quarter Intel financial report shows: revenue of $11.7 billion, down 36% year-on-year, net loss attributable to the parent of $2.8 billion, down 134% year-on-year, the largest quarterly loss in history; Gross margin shrank to 34.2%.
AMD first-quarter financial report: as of April 1, revenue was $5.353 billion, down 9% from the same period in 2022; Net loss was US$139 million, down 118% from US$786 million in the same period in 2022.
In the first quarter, Qualcomm became the only company among the three carriages to achieve no loss, but the financial report showed that the performance was still falling off a cliff, and Qualcomm's first-quarter revenue was $9.275 billion, down 17% year-on-year; Net profit was US$1.704 billion (approximately RMB11.792 billion), down 42% year-on-year.
Can NVIDIA be alone?
Not really, first after the restrictions went into effect last year, Nvidia said it planned to apply for an exemption, but there was "no guarantee" that U.S. officials would approve it. As soon as the news came out, NVIDIA's stock price fell 2.42% on the same day. In the short period that followed, the stock price continued to fall, and the market value also shrunk. Nvidia said: This is unpleasant for investors, and this change puts hundreds of millions of dollars in revenue at risk.
However, NVIDIA did not sit still, in order to minimize the impact of restrictions on its performance, NVIDIA played a trick of "saving the country with a curve".
Shortly after the U.S. restrictions went into effect, Nvidia made immediate changes and quickly launched a new advanced chip: A800, which is slightly lower in performance than the U.S. restrictions, but can smoothly bypass export restrictions as a replacement for the A100 graphics chip, which was previously banned from exporting to China.
At that time, foreign media said: From the perspective of specifications, A800 is basically a "repackaged" A100, and criticized NVIDIA for deliberately using "8", a number with auspicious words in China, in order to curry favor with China.
Other than that. It will also benefit from the explosion of artificial intelligence, as the demand for the chips needed to train and deploy artificial intelligence software has soared. NVIDIA GPUs have become a sought-after item in the current chip market.
According to CNBC reports, due to the popularity of language models such as ChatGPT, the price of NVIDIA GPU computing cards continues to skyrocket, the current price of A100 has been speculated to 100,000 yuan, H100 acceleration card has been speculated to more than 250,000 yuan, for China A800 single piece price has also been speculated to more than 150,000, and it is difficult to find a card.
To this end, NVIDIA also had to add GPU orders to TSMC. The system order will be handed over to Wistron and Hon Hai at the same time.
Although NVIDIA quickly took measures to recover some losses, coupled with the popularity of the artificial intelligence market, NVIDIA's performance was able to maintain a rise, but according to the latest financial report, NVIDIA's revenue from China still fell by $1.326 billion year-on-year, which was still affected.
So recently, the CEO of NVIDIA warned the US government about the chip war against China. He said such sanctions would cause "tremendous damage" to the U.S. tech industry. The Financial Times published an interview with him on the 24th, saying that the export control imposed by the US government on China's semiconductor technology has made it impossible for the company to sell in China and other markets, and the situation is very unfavorable. As a result, the company is "tied up".
Huang also pointed out in an interview that while the United States has imposed export controls on China, Chinese companies have begun to produce their own chips. "If China can't get chips from U.S. companies, they can only produce their own chips," Mr. Huang said, "so the U.S. has to act cautiously because China is a very important market for the technology industry." ”
In addition to NVIDIA CEO Huang Jenxun, Microsoft founder Bill Gates and global lithography machine giant ASML have also warned many times, pointing out that the US restrictions on chips will only accelerate the development of Chinese chips, causing US companies to lose more markets. said that the implementation of export controls by the United States will only give birth to a Chinese domestic lithography machine industry that is comparable to ASML lithography machines.
It is very clear that more and more companies have recognized the threat of the US chip restriction behavior to their own development and market share. However, such warnings do not seem to have worked, and the United States is still unmoved and continues to increase export controls and restrict chip shipments.
In fact, we have no illusions about this, we are not afraid of technological hegemony, but have made us realize that we must sink our hearts to accelerate independent research and development and production of chips, and believe that only by creating a complete independent chip industry chain can we go further in the field of science and technology.