“Behind Nvidia, the whole electronics industry is starting to look gray”

SOver the past twenty years, the pinnacle of electronic technology has not been reserved for fighter planes and other advanced defense equipment, but also for video game players, who often stage these same weapons of war. The explanation is simple: games require considerable computing capacity to generate breathtakingly realistic virtual images. This is how the American company Nvidia, a great specialist in graphics cards for gamers, has become, in two decades, the most expensive electronic company in the world. Because image processing is now the cornerstone of artificial intelligence systems.

Nvidia’s latest chip, the A100 model, packs 54 billion transistors into a small square the size of a fingernail. It can perform five million billion operations per second. Released in 2020, it equipped the supercomputers of the American laboratory of the Department of Energy, in Argonne (Illinois), then, very quickly, the image recognition systems in China.

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This will no longer be possible. The firm announced on Thursday 1^er September that the US government now banned it from selling the A100 to the Chinese, as well as its other models under development. The Biden administration knows that Beijing is incapable of producing such a sophisticated component and will not be for a long time. It thus intends to stop the Chinese advance in artificial intelligence.

From scarcity to overflow

For Nvidia, the blow is tough. China represents a quarter of its sales and, on August 26, the Californian company had already warned that its results would be affected by the decline in the PC market. Behind Nvidia, the entire electronics industry is starting to look gray. The giant Intel announced losses in its last quarter.

This will not get better with the multitude of new chip factories that will open in the next two years in the United States and Europe, in the name of industrial sovereignty. From scarcity to overflow. As Europeans are realizing with Russian gas, economic sanctions can hurt both the inflictor and the sufferer.

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Especially when they affect such a globalized industry. Nvidia was founded in 1993 by Taiwanese-American Jen-Hsun Huang. He has his chips produced in Taiwan, in the factories of TSMC, also forced to fold the canvas in China. Between future overcapacities and economic war, the world electronics industry is preparing for very difficult times.