Chip, the US government blocks the export of Nvidia to China

Chip, the US government blocks the export of Nvidia to China

The United States government ordered the microchip manufacturer Nvidia from limit its exports to China. The motivation, as always, concerns national security: the ban should reduce the risk of the group’s processors being used by the Chinese armed forces. The ruling emerged from a document presented by the US company before regulatory authorities. In practice now the Biden administration imposes on Nvidia a special license to export its products to China, including A100 and H100 chips. The restriction also affects the Russian market, in which however Nvidia has no customers. After the news about the government order, Nvidia stock fell 6.66% to $ 141 per share at the close of the markets in New York.

The possible consequences of the ban

Without the chips of companies like Nvidia and AmdChinese organizations will not be able to cost effectively carry out the type of advanced processing used for image and speech recognition, among many other tasks.

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Image recognition and natural language processing are common in consumer applications used by smartphone to answer questions and tag photos. But it is true that they also have military usesfor example in the scouting of satellite images for weapons or bases and in the filtering of digital communications for the collection of sensitive information.

Nvidia claimed to having recorded sales of $ 400 million last quarter in China, revenue that could be lost if Chinese companies decide not to buy alternative products. The company added that it plans to seek exemptions from the rule, but “has no guarantees” that US officials will grant them. Among other things, the ban comes precisely at the moment in which Nvidia expects a sharp decline in revenue (-17%) for the current quarter on the back of weak gaming.

When asked for a comment submitted by Reutersthe United States Department of Commerce he did not specify what new criteria it has set for chips that can no longer be shipped to China, but said it is reviewing its China-related policies and practices to “keep advanced technologies out of the wrong hands. While we are unable to outline specific policy changes at this time, we are taking a comprehensive approach to implement further necessary actions related to technologies, end-uses and end-users to protect U.S. national security and foreign policy interests. A spokesperson said.

Beijing’s reaction

China opposes a new US ban on the export of microchips because it violates “the principles of fair competition and the rules of international trade”. The move, Commerce Ministry spokeswoman Shu Jueting said, “damages not only the legitimate rights of Chinese companies, but also those of American companies. The US should immediately correct its mistakes ”.

Arm sues Qualcomm over intellectual property

But the players in the sector are also in fibrillation on this side of the new iron curtain: Arm has indeed sued Qualcomm and chip design company Nuvia (recently acquired by the Californian giant) for violation of license agreements and trademark infringement. The request is to destroy the projects developed under Nuvia’s licensing agreements with Arm, according to which its approval was required before these could be transferred to Qualcomm.

Qualcomm, that acquired Nuvia for $ 1.4 billion last year, replied that Arm has no right to interfere. “Arm’s complaint ignores the fact that Qualcomm has extensive and established licensing rights covering its custom designed CPUs and we are confident that those rights will be upheld,” he said. Ann Chaplin, Qualcomm General Counsel, in a statement.

The lawsuit represents a major break between Qualcomm and Arm, one of the group’s most important technology partners. Qualcomm has relied on Arm since it stopped designing its own custom processing cores. With respect to using Nuvia technology, one of Qualcomm’s first goals is to challenge Intel and Advanced Micro Devices within the PC and laptop markets, where the two companies are dominant.


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