“‘If we are deprived of the Chinese market, we don’t have a contingency for that. There is no other China, there is only one China.’”
That’s Nvidia Chief Executive Jensen Huang, who said he sees the potential for “enormous damage” to U.S. companies if the chip war with China escalates.
He made the comments in a recent interview with the Financial Times, cautioning lawmakers to think about the implications of further Chinese trade restrictions.
“If we are deprived of the Chinese market, we don’t have a contingency for that,” he said in the FT interview. “There is no other China, there is only one China.”
In Huang’s view, the U.S. would be “swimming in fabs” — the plants where chips are made — if the company loses the Chinese market, which would cause its capacity needs to fall by a third. “If they’re not thoughtful on regulations, they will hurt the tech industry,” he said of U.S. policymakers.
There’s the threat that China will move to build more chips itself if it can’t buy from U.S. companies. Companies in China are already starting to make chips that challenge Nvidia’s NVDA, +2.54%, according to the report.
The interview occurred just before Chinese regulators announced the results of a cybersecurity review into Micron Technology Inc. MU, +6.21% Sunday. Micron failed the review, and China ordered critical information infrastructure operators in the country to stop using the company’s products.
See also: Micron’s stock falls after China ban. Here’s why gauging the impact isn’t so simple.
Nvidia itself has been impacted by chip-war fallout, disclosing in August that the U.S. government imposed a new license requirement for future exports to China and Hong Kong that would affect the company’s A100 and H100 integrated circuits. The move effectively restricted Nvidia’s data-center business in China.
Huang could share more about the China chip wars after the close of trading Wednesday, as Nvidia is due to report its fiscal first-quarter results. Investors will be keenly focused on the opportunities ahead of Nvidia in artificial intelligence; shares of the chip maker have surged 110% so far in 2023, with the rally fueled in part by optimism about AI and Nvidia’s role in helping companies train AI applications.
See more: Nvidia’s stock has more than doubled this year. Can earnings justify the AI hype?