Stocking up on Nvidia and BYD goes small in Japan

Hello from Hong Kong, this is Cissy.

The four-day Easter weekend, when Hong Kong people fly out of the city to enjoy their time off in destinations such as Japan and Taiwan, is usually a tough time for the city’s service industry. This year was especially hard. In Causeway Bay, one of its most vibrant and iconic neighbourhoods, empty taxis lined up waiting for passengers, as Hong Kong’s biggest source of visitors, mainland Chinese, were also largely absent. Amid the surge in outbound travel, some restaurant operators even described the first day of Easter as a “super Black Friday,” with overall business falling to 30 per cent and some high-end restaurants seeing a nearly 50 per cent decline. Some retailers reported a 40 per cent drop in sales.

While Hong Kong bemoans its lack in visitors, one trip to mainland China caught global attention: Jensen Huang recently made his second visit to the country this year. While the Nvidia founder promised “every effort” to serve China during his two-day visit to Beijing late last week, it is unclear if he met DeepSeek founder Liang Wenfeng while there. The Financial Times reported that Huang met Liang to discuss how to design next-generation chips for China, but multiple Chinese state media later cited sources saying the two did not meet.

Huang’s China visit came just one day after the US government opened an investigation into whether the leading chipmaker had violated export rules with its sales to China. While it remains to be seen what efforts Nvidia will take next — in other words, how much more it will downgrade versions of its chips to be able to sell them to Chinese clients — China’s leading tech giants have already stockpiled as many Nvidia chips as possible and are looking for ways to access more.

Hungry for chips

Doughnut chart showing Nvidia's revenue breakdown by billing location in per cent

Chinese firms seem to take the age-old wisdom of “preparing for a rainy day” to heart. Before the US cut off shipments of Nvidia’s H20 AI chip to China in April, major tech companies, namely ByteDance, Alibaba and Tencent, stockpiled billions of dollars’ worth of H20, sources told Nikkei Asia’s Cheng Ting-Fang, Lauly Li and Cissy Zhou.

The three companies, among which ByteDance had the most aggressive procurement, had asked Nvidia to ship a total of around 1mn H20s — roughly a full year’s supply — as soon as possible, ideally by the end of May, though the actual number delivered fell short due to the Trump administration announcing in early April that these chips would need a licence for export.

One source said the value of those rush orders exceeded $12bn, and that several billion dollars’ worth were shipped before the new curbs took effect.

The H20 curb didn’t come as a complete surprise, according to an executive at one leading Chinese tech company. “Every major Chinese tech company had been stockpiling H20 in advance. After all, it wasn’t banned at the time, and given its strong performance, why not?” said the executive.

Knock, knock

The Trump administration wants India to open up its $125bn online retail sector fully to US ecommerce giants Amazon and Walmart, write the Financial Times’ Krishn Kaushik, John Reed and Rafe Uddin.

India allows foreign retailers to act only as online marketplaces for others to sell their products, while domestic companies can produce, own and sell goods. Washington considers this a non-tariff barrier, and wants them removed under a trade deal spanning food to cars that is being negotiated under the threat of 26 per cent tariffs on New Delhi.
Industry executives said the American retailers are working closely with the US government on these negotiations.

But the US push to prise open retail in the world’s most populous nation will pit Amazon and Walmart, owner of Indian online retailer Flipkart, against Asia’s richest man, Mukesh Ambani, whose Reliance group is the country’s largest retailer.

Any potential concessions from Indian leader Narendra Modi would also face resistance from sections of the country’s 90mn small traders.

Going big on small

With its aggressive overseas expansion continuing, Chinese EV champion BYD is making a bold move to enter the Japanese market for lightweight minicars, a segment traditionally dominated by domestic manufacturers, sources told Nikkei’s Sota Tanaka.

Minicars, or kei-jidosha in Japanese, are unique to the country and account for about 40 per cent of the country’s overall car market. BYD’s minicar model, exclusively designed for the Japanese market, could be launched in the second half of next year with a targeted price tag of around $17,700, which is at the lower end of the electric mini vehicle market in Japan.

BYD entered the Japanese market in 2023, though its cumulative sales there had totalled only 4,530 units as of March.

More urgency, less clarity

China’s rare earth export controls are rattling global supply chains as key players like Texas-based Noveon Magnetics report surging demand from buyers urgently seeking alternatives, writes Nikkei Asia’s Shaun Turton.

With China producing over 90 per cent of high-performance NdFeB magnets, which are critical for electric vehicles, wind turbines and defence systems, its tightened licensing requirements on rare earth exports, part of Beijing’s retaliation against Trump’s tariffs hike, have left US and European manufacturers scrambling.

As the only US producer of critical NdFeB magnets, magnet maker Noveon is cautious about scaling up despite the surging demand for non-China magnets, warning that China’s dominance in this space is hard to match. And despite the intensifying worldwide efforts to diversify rare earth supply chains, experts say even with more funding, building a full rare earth supply chain outside China will take years.