China's EV slowdown drags down Nvidia's 'next billion-dollar business'
BEIJING — U.S. chipmaker Nvidia this week soundly beat analysts' expectations for major revenue lines — except in automotive — as Chinese demand for electric cars moderates.
The automotive segment primarily sells chip systems for assisted driving. Nvidia CEO Jensen Huang touted it last year as the company's "next billion-dollar business."
But the unit's growth has slowed this year. Huang didn't repeat such projections in the latest earnings call.
In the three months ended July 30, automotive revenue fell by 15% from the prior quarter — the first sequential decline in more than a year.
The $253 million segment revenue was also well below the $309.3 million forecast by a FactSet analyst poll.
«The sequential decrease primarily reflects lower overall auto demand, particularly in China,» Nvidia's Chief Financial Officer Colette Kress said in a statement on the quarterly results.
She said demand for self-driving systems helped automotive revenue grow by 15% from the year-ago period.
Although still a fraction of the chipmaker's business, automotive revenue has grown rapidly from just over $100 million a quarter two years ago.
China is the world's largest auto market. In the last few years, the country has become a driver of the global push toward electric cars.
Local EV players such as BYD and Xpeng are creating stiff competition for traditional automakers, partly by playing up technological features.
Chinese original equipment manufacturers are Nvidia's primary market, said Brady Wang, associate director at Counterpoint Research.
He said the sequential automotive revenue decline could be the result of excess inventory among Chinese manufacturers, as well as their downward revisions of sales forecasts for high-end vehicles in
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