US and China Finalize Deal on Advanced Chip Export
The US has granted authorization to restart advanced chip exports to China. Nvidia and AMD will offer 15% of profits from sales to the US government. Profit sharing is only for licensed products to the Chinese market.
Background on Export Restrictions
The US initially cut back advanced chip exports to China in the Biden administration. Nvidia then began creating the H20 chips for China. When Donald Trump was installed, additional restrictions halted these exports entirely. Nvidia suffered substantial revenue loss from this. CEO Jensen Huang lobbied US and Chinese leaders. After a meeting with Trump, Nvidia assured the new deal.
Details of the Agreement
- Nvidia will remit 15% of H20 AI chip sales revenue in China.
- AMD will remit the same percentage on MI 308 chip sales.
- The two firms have to keep records of sales and submit them to US authorities.
- The money will go towards chip research and technology safety.
Reason for Policy Change
The US was concerned that China would utilize high-tech chips for the military. These security issues resulted in the initial constraints. The move lowered revenue for US business and provided a boost to Chinese rivals. In response, the US relaxed the regulations.
Trade War Context
The US and China have suspended tariff hikes for 90 days. China has also relaxed restrictions on exports of rare earth minerals. The US government's move to permit chip exports is a part of this larger trade realignment.
Tags Cloud
