The US Department of Commerce’s announcement that it would impose a fresh round of sanctions on exports to China by major US artificial intelligence (AI) chip designers is expected to harm suppliers, including those in Taiwan, analysts said on Wednesday.
The department this week announced new export licensing requirements for Nvidia Corp’s H20 and Advanced Micro Devices Inc’s (AMD) MI308 chips, which are critical to AI development.
The new US licensing requirements would further hamper Nvidia and AMD, while Taiwanese suppliers to the two companies would also be affected, Taiwan Industry Economics Services researcher Arisa Liu (劉佩真) said.
Photo: An Rong Xu, Bloomberg
The Taiwanese companies most likely to be affected include AI server makers such as Inventec Corp (英業達) and Mitac Holdings Corp (神達控股), which supply Chinese cloud service providers such as Baidu Inc (百度), Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊), local news reports said yesterday.
An industry expert, speaking on condition of anonymity, on Wednesday called the latest sanctions “ridiculous,” as the H20 and MI308 chips were designed to comply with US restrictions on exports to China.
China is unlikely to be heavily affected by the sanctions in the short term, as many Chinese buyers have reportedly built up large inventories of H20 and MI308 chips, the expert said.
The US’ move to further restrict chip exports to China would prompt Chinese chipmakers to speed up production of chips similar to those made in the US, they added.
Citing the example of Huawei Technologies Co’s (華為) Ascend 910B processor, which is close to Nvidia’s H20 in terms of efficiency, the expert said that such efforts could accelerate China’s progress toward semiconductor self-sufficiency.
Therefore, the sanctions are likely to bolster China’s chip industry, which would not only harm Nvidia and AMD, but also their Taiwanese suppliers, they said.
On Tuesday, Nvidia said it would book a quarterly charge of about US$5.5 billion tied to restrictions on exports of its H20 graphics processing units to China and other destinations, while AMD on Wednesday said it would see charges of about US$800 million related to the sales restrictions imposed on its MI308 units.
Nvidia CEO Jensen Huang (黃仁勳) yesterday said that China is an important market for Nvidia.
“We hope to continue to cooperate with China,” Huang said in a meeting with Ren Hongbin (任鴻斌), head of the China Council for the Promotion of International Trade, state broadcaster China Central Television reported.
Huang arrived in Beijing earlier in the day at the invitation of the trade organization.
Additional reporting by Reuters
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS