Recently, executives from American technology companies have visited China intensively. On November 25th, Nvidia executives visited China and met with senior officials from the Chinese Ministry of Commerce, sending a signal that multinational technology giants attach great importance to the Chinese market.
According to the website of the Ministry of Commerce, Wang Shouwen, International Trade Negotiator and Deputy Minister, met with Jay Puri, Executive Vice President of NVIDIA Corporation in the United States, to exchange views on issues such as NVIDIA's development in China. The Chinese side welcomes Nvidia to continue to take root in China.
As one of the most important technology companies in the world today, NVIDIA's future business in China is highly concerned by the market.
Seeking a balance between policies and promoting global technological cooperation
Prudential is responsible for Nvidia's global operations. He stated that Nvidia regards China as an important market and will continue to strengthen communication with Chinese partners, provide high-quality and efficient products and services, and actively participate in the development of China's digital economy.
Regarding the meeting, a statement from Nvidia to China Business said: "We are very happy to have the opportunity to meet with government officials in every market we serve." The company did not provide more information to China Business News about the talks between the two sides, nor did it disclose whether Hwang Renxun, the founder CEO of Nvidia, plans to visit Chinese Mainland.
At present, as artificial intelligence technology is exploding globally, Nvidia, as a technology company that provides the vast majority of AI chips for global data centers, is becoming increasingly important in various industries around the world. Since the beginning of this year, Nvidia's stock price has cumulatively increased by nearly 190%.
However, as of the close on November 25th, Nvidia's stock price has fallen by over 4%, surpassing Apple and losing its position as the company with the highest stock market value in the United States.
The decline in Nvidia's stock price is related to a rare downgrade of its investment rating by investment bank analysts in recent days. A investment report from Phillip Capital, a Singaporean investment and wealth management company, suggests that as the US China tariff war may reignite, if the US implements stricter tariff policies, it could have an impact on Nvidia's stock price and downgrade its investment rating from "buy" to "slow ramp up".
NVIDIA's development in China is facing multiple challenges. In the recent financial report, when asked about the possibility of the Trump administration imposing higher tariffs on high-tech product exports, Huang Renxun said, "No matter what decision the new administration makes, we will certainly support it. The company will fully comply with any regulations that come with it
Recently, during his visit to Hong Kong, Huang Renxun reiterated that even if the new government implements stricter export controls, "we will strive to strike a balance between complying with laws and continuously promoting technological cooperation, supporting and serving customers around the world.
Facing fierce competition in China
Affected by export controls, Nvidia's revenue share in the Chinese market has decreased from approximately 24% in the 2019 fiscal year to approximately 13% currently.
Earlier this year, there were reports that the H20 chip could not be sold in China and had to be sold at a lower price. According to a reporter from First Financial News, although H20 focuses on "cost-effectiveness", due to technological limitations, it is difficult to widen the gap with Chinese competitors, so demand is also limited to some extent.
According to an analysis report by SemiAnalysis, chips specifically designed for the Chinese market are also facing manufacturing cost challenges. The institution stated that due to the higher memory capacity and manufacturing cost of H20 compared to H100, its selling price is about half of H100, which will lead to a significant decline in profits.
Against the backdrop of global supply shortage and production bottlenecks of NVIDIA's advanced chips, whether the company still has the motivation to continue developing products with low profits, mediocre sales, and fierce competition is a question that NVIDIA needs to evaluate.
Huang Renxun stated during the earnings conference in May this year that Nvidia is still doing its best to serve the Chinese market. He said, "Our business in China is much lower than before, and due to the limitations of our technology, we are now facing more intense competition in the Chinese market. These are all real things. However, we will continue to do our best to serve the customers and market there
Huang Renxun has been less discussing China's business recently. He is vigorously promoting the shipment of Nvidia's new generation flagship AI chip Blackwell globally. The chip is expected to bring Nvidia billions of dollars in revenue in the fourth quarter of this year and is expected to achieve significant sales growth next year.
According to Huang Renxun's recent visit to Hong Kong, Nvidia will continue to "retain" its business in China. Regarding what strategy Nvidia will adopt in the Chinese market in the future, Nvidia told reporters, "We do not comment on products that have not yet been released
In the eyes of some analysts, Nvidia still has great potential in China. Gartner analyst Sheng Linghai told First Financial reporters, "There is a huge demand for AI related infrastructure in China now, which will definitely drive Nvidia's business in China. Nvidia will not give up this huge market. In addition to data centers, Nvidia will also have a large market space in industrial intelligent manufacturing, autonomous driving and other fields