**Washington:** US export controls on advanced semiconductor chips may inadvertently accelerate China’s chip industry growth. Industry experts warn this could strengthen Chinese manufacturers like Huawei, challenging US firms such as Nvidia and AMD, which face financial impacts amid escalating trade tensions and licensing hurdles.
The Trump administration’s recent measures to restrict exports of advanced semiconductor chips to China have sparked significant concern among industry experts, who suggest these efforts might ultimately strengthen Chinese chip manufacturers, potentially enabling them to capture a larger share of the global market.
Jack Gold, principal analyst at J Gold Associates, told AFP, “What’s actually happening is that the US government right now is handing China a big win as it tries to get their own chip business going. Once they’re competitive, they’ll start selling around the world and people will buy their chips.” He added that regaining lost market share would become challenging for US chip firms once Chinese competitors establish themselves.
These developments come as Silicon Valley heavyweights Nvidia and Advanced Micro Devices (AMD) disclosed to US regulators that new export licensing requirements are expected to significantly impact their financial results. Nvidia anticipates a loss of approximately $5.5 billion, while AMD forecasts an $800 million hit, according to filings with the US Securities and Exchange Commission (SEC).
Nvidia revealed that it must now seek licences to export its H20 chips to China owing to US government concerns that these chips could be employed in Chinese supercomputers. Previously, sales of Nvidia’s most advanced graphics processing units (GPUs), which are instrumental in powering cutting-edge artificial intelligence (AI) applications, had already been curtailed. The H20 chips were developed specifically for the Chinese market to conform to earlier US export rules, but the new licensing regime presents a significant obstacle, said Gold.
Similarly, AMD confirmed the new US export controls apply to its MI308 GPUs, which cater to high-performance fields such as gaming and AI. The company acknowledged that there is no assurance that requested export licences to China will be granted.
Independent technology analyst Rob Enderle forecast that China’s semiconductor manufacturers, spearheaded by major players such as Huawei, will accelerate their quest to lead the market. “It’s going to be a godsend for China as they spin up their own microprocessor business,” Enderle stated, describing the US’s tighter export restrictions as a “really quick way to hand over US leadership in microprocessors and GPUs.”
Gold noted the Chinese government possesses both the resources and motivation to advance its chip industry. He remarked on the international economic context, observing that while US President Donald Trump may believe he can apply pressure through restrictive measures, “the worldwide economy is not like that.” Moreover, he commented that tariffs imposed by the US have alienated some allies, thereby increasing their incentive to source chips from China.
Enderle concurred that US companies may face growing competitive challenges as foreign firms, especially those overseas, find themselves in stronger positions.
Despite these challenges, Nvidia’s CEO Jensen Huang has expressed confidence publicly that the company can comply with new US export rules without hindering technological progress. He emphasised that the global development of artificial intelligence will continue unabated.
Wedbush analyst Dan Ives described Nvidia as “one of the most important pieces in this (US) chess game with China,” highlighting Nvidia as the central chipmaker powering the AI revolution. He noted the US government’s approach as placing a “‘Do Not Enter’ sign in front of China” to slow its technological progress. However, Ives cautioned that tensions between the two countries are far from settled, anticipating “more punches to be thrown by both sides” in the ongoing chip trade conflict.
The evolving situation underscores the complex economic and strategic dynamics surrounding the global semiconductor industry, where government policies intersect with technological innovation and international competition.
Source: Noah Wire Services
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