Chip designer and computing firm Nvidia said its revenue fell 17 percent to $5,931 million in Q3 2022 as a result of restrictions on exports of its A100 and H100- based products to China.
The U.S. government announced restrictions on exports of Nvidia’s A100 and H100- based products to China. These restrictions impacted third-quarter revenue, with the decline largely offset by sales of alternative products into China, Nvidia said.
Nvidia has generated revenue of $3.83 billion (+31 percent) from Data Center business, $1.57 billion (–51 percent) from Gaming business, $200 million (–65 percent) from Professional Visualization business and $251 million (+86 percent) from Automotive and Embedded business.
Nvidia said year-on-year growth was broadbased across U.S. cloud service providers, consumer internet companies and other vertical industries. Sequential growth was impacted by softness in China. Nvidia started shipping H100 data center GPU based on the new Hopper-architecture.
Cloud companies are increasingly using Nvidia chips in their systems. Microsoft is working with the company to build a “massive” computer to handle intense artificial intelligence computing work in the cloud.
As of August, Nvidia’s market share of accelerator chips inside the world’s six biggest clouds’ infrastructure grew to 85 percent, brokerage Jefferies said in a note in October.
While U.S. export restrictions have been a cause for worry, Nvidia’s production of a downgraded iteration of the A100, called A800, which complies with recent export control rules, has been a bright spot as it helped lessen the financial blow.
Nvidia Chief Financial Officer Colette Kress said while the export restrictions impacted third-quarter revenue, the decline was “largely offset by sales of alternative products into China.”
Nvidia’s gaming business, a segment that once drove its revenue, was hit by weak consumer demand, but also a change in the way Ethereum crypto currency is created.
“This may have contributed to increased after-market sales of our GPUs in certain markets, potentially impacting demand for some of our products, particularly in the low-end,” Kress said.
Nvidia’s GPU chips have been popular for mining crypto currencies but a crypto market rout is also hurting demand. CEO Huang said that going forward he does not expect blockchain to be an important part of the business.
Nvidia forecast current-quarter revenue at $6 billion, plus or minus 2 percent, versus expectation of $6.09 billion.
