Nvidia Faces US Block on AI Chip Shipments to Malaysia and Thailand

Nvidia is at risk as the US considers blocking AI chip shipments to Malaysia and Thailand. The US leader in graphics processors also develops associated software and offers laptops, desktops, gaming computers, and software for visual and virtual computing. Net sales break down by industry between data storage, gaming, professional visualization, automotive, and other. Net sales are distributed geographically across the US, Taiwan, China, and other regions.

Nvidia, the leading manufacturer of AI chips, is facing potential export restrictions as the US contemplates blocking shipments to Malaysia and Thailand. The move is part of a broader effort by the US to curb suspected semiconductor smuggling into China, according to sources familiar with the matter [1]. The US Commerce Department is drafting new rules to restrict the export of advanced AI chips to these Southeast Asian nations, which could have significant implications for Nvidia's operations and market presence.

The proposed regulations, if implemented, would require companies to obtain a US export license before shipping AI GPUs to Malaysia and Thailand. The draft rule includes a temporary provision allowing firms based in the US and allied countries to continue shipping AI chips without a license for a limited time after the rule is published [2]. However, this temporary exemption is expected to end soon, potentially disrupting the supply chain and affecting businesses that rely on these shipments.

Nvidia's exposure to these markets is not extensive, but the company's products are in high demand globally, including in Southeast Asia. The proposed restrictions could impact Nvidia's ability to serve customers in these regions, potentially leading to a loss of market share and revenue. Furthermore, the restrictions could also affect Nvidia's partners and customers, including data center operators and cloud service providers, who rely on Nvidia's AI chips for their operations.

The US's scrutiny of Malaysia and Thailand is driven by concerns over the global spread of AI chips and the potential for Chinese companies to benefit from these technologies. The recent surge in chip shipments to Malaysia, in particular, has raised concerns about potential smuggling into China [2]. The proposed restrictions aim to address these concerns and prevent Chinese AI companies from gaining access to advanced AI chips.

The impact of these restrictions on Nvidia's financial performance will depend on various factors, including the extent of the restrictions, the duration of the temporary exemption, and the company's ability to adapt to the new regulatory environment. Investors and financial professionals should closely monitor Nvidia's response to these developments and the potential implications for the company's business and market position.

References:
[1] https://www.businesstimes.com.sg/international/asean/us-plans-ai-chip-curbs-malaysia-thailand-over-china-concerns-sources
[2] https://www.trendforce.com/news/2025/07/07/news-u-s-reportedly-weighing-ai%E2%80%91chip-export-curbs-to-malaysia-and-thailand-posing-risks-for-taiwanese-server-makers/