Reported China chip export ban could allow Nvidia to catch up on backlog: Susquehanna's Rolland

WHEN THESE KIND OF STORIES LEAK, THEY TYPICALLY HAPPEN, COME TO FRUITION SOMETIME IN THE NEXT FEW WEEKS OR MONTHS. SO, WE ARE BRACING FOR SOME SORT OF AN IMPACT HERE, WHICH, YOU KNOW, CFO FOR NVIDIA WAS OUT TODAY, SAYING IT WOULD BE LIMITED. SO, THAT'S HOW WE'RE THINKING ABOUT IT >> DO YOU BUY THAT I MEAN, SO -- YOU'RE GOING TO SAY, WE'RE GOING TO TAKE

THE CFO AT HIS WOURD AND BELIEVE THAT, BECAUSE WASN'T THE A-800 CHIP, THE WORKAROUND CHIP THEY DEVELOPED TO GET AROUND THE BAN ON THE A-100, WHICH WAS SUBJECT TO THE ORIGINAL BAN IN OCTOBER >> THAT'S RIGHT. SO, ORIGINALLY TALKED ABOUT THIS BEING A $400 MILLION IMPACT. WE NEVER REALLY SAW THAT IN THE NUMBERS THE FIRST TIME AROUND WHEN THEY SWITCHED TO THE 800. SO, WE THINK

SALES IN CHINA ARE STILL VERY, VERY ROBUST. THERE HAVE BEEN STORIES ABOUT SMUGGLING OTHER CHIPS IN WITH CRATES OF LIVE LOBSTERS, FOR EXAMPLE, YOU CAN FIND THOSE THINGS -- THOSE STORIES OUT THERE ON THE INTERNET. WE THINK SALES INTO CHINA ARE ROBUST, BUT GIVEN THE COMMENTS TODAY, WE THINK THAT THE BACKLOG FOR THESE PRODUCTS ARE TREMENDOUS RIGHT NOW AND SO THAT IF CHINA'S OUT OF THE

LOOP HERE, AND THEY CAN'T SHIP, SOMEONE ELSE IS STEPPING IN AND SO, IT TELLS US A LITTLE BIT ABOUT DEMAND HERE. IT ALSO PROBABLY TELLS US A LITTLE BIT ABOUT SUPPLY, WHICH WE'VE BEEN PICKING UP IN CHINA, OR, IN ASIA, EXCUSE ME, ABOUT SOME, WHAT'S CALLED CO-LOSS CAPACITY A TECHNIQUE THAT'S PUT INTO THESE A.I. CHIPS AND TSM MAY BE LIMITED IN THAT CO-LOSS CAPACITY GOING INTO

THE BACK HALF SO, GIVEN LIMITED SUPPLY AND THEN DEMAND COMING FROM OTHER PLACES, WE DON'T THINK THIS GOING TO BE A BIG PROBLEM. >> SO, CHRIS, IT'S KAREN, THANK YOU FOR BEING ON WHO IS GOING TO FILL THAT GAP THEN, IF -- NVIDIA DOESN'T NEED THAT BUSINESS, CAN EASILY SELL ELSEWHERE, WHO ARE GOIIS GOING L THAT GAP >> IT'S GOING TO COME FROM CHATGPT COPIERS, FROM

A.I. STARTUPS THAT WANT TO PUT ALL THAT INFRASTRUCTURE IN-HOUSE INSTEAD OF USING IT ON CLOUD IT IS COMING FROM EVERYWHERE AND IT WAS REALLY CHATGPT LAST NOVEMBER THAT LAUNCHED 1,000 CHIPS. AND SO, IF 20 OF THOSE SHIPS ARE GONE, YOU KNOW, THEY DON'T BELONG TO CHINA, THEY'RE GOING TO BE PICKED UP ELSEWHERE. >> THAT IMPLIES THERE WAS A SUPPLY CONSTRAINT ON THESE CHIPS TO BEGIN WITH,

AND THEY COULD ACTUALLY SELL A LOT MORE, EXCEPT THAT THEY'RE ONLY PUTTING A CERTAIN AMOUNT I MEAN, IF YOU ARE SAYING THAT THEY DON'T SELL TO CHINA, THESE OTHER GUYS ARE GOING TO EASILY PICK IT UP, I MEAN, WHAT DOES THAT TELL YOU ABOUT THE DYNAMICS OF THE MARKET HERE >> I THINK THAT'S EXACTLY WHAT I'M TELLING YOU. >> ALL RIGHT >> IS THAT BACKLOG HAS

BALLOONED. HAS EXPANDED OVER THE PAST SIX TO NINE MONTHS, AND NVIDIA'S NOW IN A SITUATION WHERE IT HAS LIMITED SUPPLY, PARTICULARLY GOING INTO Q-3, Q-4. AND SO, IT, YOU KNOW, THIS CHINA SITUATION MIGHT ACTUALLY ALLOW THEM TO CATCH UP WITH SOME OF THEIR BACKLOG FROM THEIR OTHER CUSTOMERS HERE >> PUTS CHINA ON THE BACK FOOT IN TERMS OF COMPETING IN THE A.I. RACE OVERALL, AS WELL

BUT CHRIS, I WANTED TO ASK YOU, BECAUSE THERE'S THIS NOTION THAT CHINA, YOU MENTIONED THE LOBSTERS, AND THERE'S THE STORY IN, I THINK PC MAGAZINE, SO, NOT JUST SOME WEIRD TIKTOK VIDEO GOING AROUND ABOUT LOBSTERS AND CHIPS. ABOUT THESE CHIPS BEING SMUGGLED, I THINK FROM HONG KONG, OR INTO HONG KONG, ALONGSIDE CRATES OF LOBSTERS BUT THERE IS ALSO THIS NOTION THAT THERE HAD BEEN OVER --

NOT OVERSUPPLY, BUT PULL FORWARD, THEY WERE STOCKPILING CHIPS IN CHINA. HOW DO WE KNOW THAT END MARKETS IN THE UNITED STATES ARE NOT STOCKPILING, EITHER? >> I DOUBT THEY'RE STOCKPILING IN THE UNITED STATES THEY'VE CERTAINLY PUT IN SOME ORDERS, THERE MAY BE SOME DOUBLE ORDERERS THERE, BUT THE POINT THAT YOU BROUGHT UP AROUND CHINA, WE ABSOLUTELY AGREE WITH. WE SAW THIS TAKE PLACE IN THE FPGA

MARKET AROUND 5G, RIGHT BEFORE THE U.S. BANNED THOSE FPGA PRODUCTS. WE THINK CHINA HAS BEEN DOING THIS THEY HAVE BEEN TAKING IN SUPPLY OVER THE PAST FEW MONTHS, TRYING TO STOCKPILE THESE THINGS BECAUSE OF EXACTLY WHAT WE'RE TALKING ABOUT RIGHT NOW. SO, THAT IS A SMALL OVERHANG, BUT IF YOU CAN'T SHIP TO CHINA