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US restricts chip exports to China

The US government has ordered two leading chipmakers to restrict exports of their powerful products to China.

Nvidia has announced that it has been informed by US authorities of changes to the rules for exporting chips to the Asian country, and AMD has confirmed similar information. The measures aim to make it more difficult for China to access technologies that could be used in the military field.

Nvidia said on Wednesday that the new rules prevent it from exporting its powerful A100 and H100 series chips. On Thursday, there was a bit more positive news for the company, saying that while chip sales will still be severely restricted, at least it will be able to continue developing the H100 chip for artificial intelligence in China.

Large group of cardboard boxes connected to microchip

In its announcement, Nvidia said.

“The U.S. government has authorized exports, re-exports, and in-country transfers needed to continue NVIDIA Corporation’s, or the Company’s, development of H100 integrated circuits,”

Overall, these restrictions could lead to as much as $400 million in losses from missed sales.

If you spotted our recent article on Nvidia’s quarterly results, you may have read that the company was rescued by the data center segment, which almost single-handedly grew by 61%. That segment just includes sales of the older A100 chip, which has been shipping for a little over 3 years now, and the new H100 chip is a new chip under development that was originally supposed to come to market by the end of this year.

Competitor AMD believes that the new rules will not allow the export of MI250 chips to China, but this should not have any material impact on the company’s business.

The aim is said to be to prevent the use of China’s military technology

Nvidia says the measure aims to ensure that its products are not used in Chinese military technology or by the Chinese military. The chips, which are subject to stricter export rules, play a key role in voice or facial recognition devices, but may also have military applications.

Read also: China doesn’t like Biden’s $1.2bn arms sale to Taiwan

You can also read about how the chip manufacturing sector in China is doing in our earlier article. There you will find that the chip manufacturing sector in China is growing faster than anywhere else in the world. So it may soon be the case that China will be able to make do with its chips and won’t need American ones at all. For now, however, powerful American chips are still in demand in China.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...

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