00:00China may soon be getting U.S.-made AI chips from NVIDIA and AMD,
00:04as long as those companies hand over 15% of their China sales revenue to the U.S. Treasury.
00:10That's according to a report from the Financial Times.
00:13It comes to make further reports that Beijing is pushing for looser U.S. chip restrictions
00:17as part of a trade deal with Washington.
00:20To help us see how these pieces fit together, let's go to our lead tech reporter, Chris Gorin,
00:24who is live in our Taipei newsroom.
00:26Chris, what's going on with all this chip activity?
00:30Well, I think the key point is what you mentioned, Eric.
00:35NVIDIA and AMD may be trading 15% of their Chinese sales revenue
00:40in exchange for the right to sell their chips there.
00:43Now, this is because currently advanced AI chips are restricted by U.S. export controls.
00:50And there's been an on and off again struggle between U.S. chip makers like NVIDIA
00:57and the White House over this issue for the past several months.
01:00Now, several are questioning whether this move aligns with the U.S. stated goal of slowing down Chinese AI development
01:07and keeping America's edge.
01:10One analyst that I spoke to sent me a written response that says, in part,
01:14while this 15% fee might support U.S. initiatives like subsidies for domestic chip production,
01:21it could also harm long-term U.S. tech competitiveness by accelerating China's drive for self-reliance,
01:29shifting the global AI landscape in the years ahead.
01:32For Taiwan, of course, more chip sales in China means more orders for companies like TSMC,
01:37which is good for their bottom line.
01:40But the Taiwanese government has also expressed similar concerns to the U.S.
01:44about censorship and security in Chinese AI models, so it's a bit of a mixed bag.
01:51And Chris, what do we know about what China wants out of all this?
01:58Well, recent reports seem to indicate that Beijing may be targeting high-bandwidth memory, or HBM,
02:04more than the full AI chip packages from NVIDIA and AMD that we've been talking about.
02:10And that's because without HBM, it's really hard for Chinese chip designers to reach the kinds of speeds they need
02:17to match their U.S. counterparts.
02:20And reportedly, Beijing is asking Washington to lift the export controls on HBM
02:25as part of any trade deal with Washington.
02:28And tomorrow, August 12th, is also the deadline for which U.S. tariffs against China are supposed to begin.
02:35So we should be clear, though, that this 15% fee and the HBM talks have not been confirmed by either side.
02:42But we will be watching this story closely as the week progresses.
02:45Eric?
02:47Thanks for that explanation, Chris.
02:49That was Chris Korn reporting live from our newsroom.
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