US Chip Ban Affects Most of China’s Tech Giants

Experts say that Washington’s decision to block the export of two advanced semiconductors to China will have an impact on most big tech businesses that use public cloud services or artificial intelligence training modules.

China expressed its opposition to the move on Thursday, following Nvidia’s announcement on Wednesday (US time). The chip designer from California said US officials warned it to halt exporting two top computing processors to China for artificial intelligence work.

In the worst case, Washington would widen the prohibition to prohibit contract chipmakers like TSMC and Samsung from producing semiconductors for Chinese chip designers. Nvidia, on the other hand, said on Thursday that Washington had approved exports and in-country transfers required to construct the company’s H100 artificial intelligence processor.

According to the company, the government has authorized Nvidia to produce the A100 and H100 AI chips through its HK factory until September 1, 2023.

Washington is targeting AMD and Nvidia CPUs for AI and machine learning applications, namely for building training modules for activities such as natural language processing. These modules may also be useful to the military in simulating bomb simulations and weapon design.

According to Goldberg of D2D, there are few Chinese companies that can swiftly offer processors to replace those of AMD and Nvidia, and the restrictions will likely push greater funding for domestic chip startups to close the gap with US firms. On Thursday, shares of Chinese AI chipmakers Hygon Information Technology Co and Loongson Technology Corp rose 10% and 6%, respectively.

Biren, a firm created by Nvidia and Alibaba alumni, debuted a 7nm chip last week, which many say represents a significant development for China’s chip sector.