Analysis: Nvidia, AMD's 'Unprecedented' Chip Export Controls

TaiwanPlus News

According to the Financial Times, American chip firms Nvidia and AMD have agreed to give 15% of their China chip revenue to the U.S. The move is an unprecedented one. To find out more about how this might shake up the chip market, TaiwanPlus spoke to Olivia Shen at the United States Studies Centre at the University of Sydney.

Transcript

00:00American chip firms AMD and NVIDIA have agreed to pay the U.S. government 15% of their China

00:05sales in exchange for export licenses. What's your initial thoughts on this agreement?

00:11This is quite an unprecedented agreement, and it really goes to show how important chips have

00:16become in this AI race between the U.S. and China. So the Trump administration has unapologetically

00:22called for companies to invest more in the U.S. However, this is quite different in terms of a

00:30move that uses export controls as leverage. Now, the U.S. administration has long said that they

00:37would deny China access to AI chips because of national security concerns, especially concerns

00:43that China would use these chips in military applications or otherwise overtake the U.S.

00:48dominance in AI. Now, it seems a price has been put on those national security concerns,

00:54and the price seems to be 15% of global revenues. If NVIDIA and AMD are going to benefit from relaxed

01:03export controls, that is the price that they will have to pay to the U.S. government to achieve it.

01:08How would you expect export controls like this to affect the AI race?

01:14It's important to note that the current chips we're talking about in the frame of this

01:18agreement are not the cutting edge AI chips. You could argue, therefore, that giving access to

01:24those chips to China are not going to compromise America's lead in AI. On the other hand, I think

01:31it's important to look at how China has actually responded to tightening export controls over the

01:36past number of years. Chinese companies have been able to produce really impressive products like

01:42DeepSeq's R1 model and Moonshot AI's Kimi-2 model, despite not having access to the best of the best.

01:49I think the lesson we should draw from this is not to underestimate China's capacity to do more with

01:56less. And so the influence this will have on the longer term AI race is really quite uncertain,

02:02but I would certainly heed the warning of not underestimating Chinese capabilities.

02:06Taiwan. TSMC is a huge supplier of both AMD and Nvidia. Is there any impact with these export

02:15controls, if any, for the Taiwanese chip market? I think you will see that if this agreement goes

02:21ahead, there will be increased sales, right? That's the natural that China will take advantage of the

02:27relaxed restrictions and it will probably mean more business for TSMC. There is, however,

02:34at the same time quite a lot of pressure from the Trump administration for chip manufacturing to be

02:40reassured back to the United States. I think he's put it very bluntly that he expects to see chip

02:46manufacturing return home to the US. I don't think that pressure is going to abate. I certainly think

02:54that the increase in sales and the increase in demand will create opportunities, but there will be

02:59opportunities that the Trump administration will be looking very closely and wanting to make

03:04sure that those opportunities benefit American investment and American workers.

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