The world’s largest maker of artificial intelligence chips has found itself in the front line of a fresh push by the US to frustrate China’s ambition of overtaking the US to become the world’s technology superpower.
Last week, Nvidia disclosed (in a Securities and Exchange Commission filing) that the US government had imposed export restrictions on two of its most advanced chips, barring the company from exporting them to China or Hong Kong. Advanced Micro Devices (AMD) also revealed it had received a similar order.
The US fears that some of their advanced semiconductors might be used by China’s military.Credit:AP
While AMD said the impact of the ban was unlikely to be material, for Nvidia it seems it will be highly material, affecting about $US400 million ($590 million) of sales in the current quarter. It said it had been told the new licensing requirement was to reduce the risk the products might be used by China’s military.
The restrictions on the sales of advanced semiconductors – it appears Nvidia and others in the US will be able to continue to sell less sophisticated chips to China – follows the recent passage through Congress of the CHIPS Act, which provides more than $US52 billion of funding to boost domestic manufacturing of semiconductors in the US. Taiwanese and Korean chipmakers are now constructing manufacturing facilities in the US.