export controls

The U.S. government revoked TSMC’s export waiver (VEU status) for its Nanjing, China, facility, requiring individual licenses for U.S.-origin chipmaking equipment shipments. SK Hynix and Samsung also lost VEU privileges. This aims to close a “Biden-era loophole” on foreign-owned fabs in China and tighten control over technology flows, limiting China’s chip production capabilities and ability to expand their supply chain footprint. While TSMC anticipates limited financial impact, this move underscores a broader U.S. strategy to reshore manufacturing and restrict China’s semiconductor advancement.

Nvidia is reportedly developing a new AI chip, the B30A, for China, aiming to outperform its current H20 offering while complying with US export controls. Utilizing its Blackwell architecture with a single-die design, the B30A is expected to have roughly half the performance of the B300. Nvidia is also purportedly creating an RTX6000D chip for AI inference in China. These moves reflect Nvidia’s strategy to maintain a presence in the critical Chinese market amid US-China trade tensions and regulatory scrutiny. Samples of the B30A may be sent next month.

The U.S. maintains a strict stance on AI chip exports to China, particularly regarding advanced technology like Nvidia’s “Blackwell” chip. Former President Trump opposes its sale to China, citing national security concerns and the potential for accelerating Chinese AI development. He believes the U.S. holds a significant technological advantage in chip design. Nvidia’s CEO is expected to discuss export licenses, highlighting ongoing negotiations. While some argue restricting access could spur indigenous Chinese chip development, the U.S. aims to limit China’s access to cutting-edge AI capabilities.

A *People’s Daily* commentary questioning the security of Nvidia’s H20 chip has sparked debate over potential “tracking” and “remote shutdown” vulnerabilities. Nvidia denies any “backdoors,” but China seeks verifiable proof of security, emphasizing cybersecurity’s importance. U.S. legislation, the “Securing Semiconductor Supply Chains Act,” proposes tracking advanced chips to prevent illegal diversion. Experts believe regulatory scrutiny targets potential risks associated with Nvidia’s products, aiming to ensure their security before widespread adoption in China. Verifiable evidence from Nvidia CEO Jensen Huang is needed to alleviate concerns.

Nvidia’s Chief Scientist Bill Dally suggests U.S. export restrictions on China’s AI sector may have unintentionally boosted China’s capabilities. He notes skilled Chinese researchers are now working for Huawei, fostering indigenous AI solutions. Restrictions have created a localized ecosystem, increasing China’s share of high-end AI researchers. Though China may lag in hardware, it possesses significant intellectual capital. The policy has propelled Huawei’s growth, eliminating key rivals and fostering competitive software solutions.

The United States has reportedly restricted exports of crucial technologies to China, impacting key sectors like aerospace and semiconductors. The restrictions, impacting the development of the COMAC C919 aircraft, are seen by Beijing as an overreach of national security concerns. China’s Ministry of Foreign Affairs condemned the US actions, emphasizing its commitment to international norms in its export controls and advocating for dialogue and cooperation.

NVIDIA denies plans to establish a chip design center or modify GPU blueprints in China for export compliance, asserting strict adherence to U.S. regulations. While exploring expanded corporate offices in Shanghai, the company maintains technical firewalls, balancing its 10% China-derived revenue amid tightened U.S.-China tech trade restrictions post-2023 export controls.