{"id":76290,"date":"2025-08-17T12:05:11","date_gmt":"2025-08-17T12:05:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/76290\/"},"modified":"2025-08-17T12:05:11","modified_gmt":"2025-08-17T12:05:11","slug":"nvidia-and-amds-special-treatment-shakes-up-the-global-chip-supply-chain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/76290\/","title":{"rendered":"Nvidia and AMD\u2019s \u2018special treatment\u2019 shakes up the global chip supply chain"},"content":{"rendered":"

Donald Trump\u2019s decision to let Nvidia<\/a> and AMD export AI processors<\/a> to China in exchange for a cut of their sales will have repercussions far beyond the U.S.<\/p>\n

The semiconductor supply chain is global, involving a wide array of non-U.S. companies, often based in countries that are U.S. allies. Nvidia\u2019s chips may be designed and sold by a U.S. company, but they\u2019re manufactured by Taiwan\u2019s TSMC, using chipmaking tools from companies like ASML, which is based in the Netherlands, and Japan\u2019s Tokyo Election, and using components from suppliers like South Korea\u2019s SK<\/a> Hynix. <\/p>\n

The U.S. leaned on these global companies<\/a> for years to try to limit their engagement with China; these efforts picked up after the passage of the CHIPS Act and the expansion of U.S. chip-export controls in 2022. Washington has also pressured major transshipment hubs, like Singapore and the United Arab Emirates, to more closely monitor chip shipments to ensure that controlled chips don\u2019t make their way to China in violation of U.S. law.<\/p>\n

Within the U.S., discussion of Trump\u2019s Nvidia deal has focused on what it means for China\u2019s government\u2019s and Chinese companies\u2019 ability to get their hands on cutting-edge U.S. technology. But several other countries and companies are likely studying the deal closely to see if they might get an opening to sell to China as well.\u00a0<\/p>\n

Trump\u2019s Nvidia deal \u201ctells you that [U.S.] national security is not really the issue, or has never been the issue\u201d with export controls, says Mario Morales, who leads market research firm IDC\u2019s work on semiconductors. Companies and countries will \u201cprobably have to revisit what their strategy has been, and in some cases, they\u2019re going to break away from the U.S. administration\u2019s policies.\u201d<\/p>\n

\u201cIf Nvidia and AMD are given special treatment because they\u2019ve \u2018paid to play\u2019, why shouldn\u2019t other companies be doing the same?\u201d he adds.<\/p>\n

Getting allies on their side<\/p>\n

The Biden administration spent a lot of diplomatic energy to get its allies to agree to limit their semiconductor exports to China. First, Washington said that manufacturers like TSMC and Intel<\/a> that wanted to tap billions in subsidies could not expand advanced chip production in China. Then, the U.S. pushed for its allies to impose their own sanctions on exports to China.\u00a0<\/p>\n

\u201cExport controls and other sanctions efforts are necessarily multilateral, yet are fraught with collective action problems,\u201d says Jennifer Lind, an associate professor at Dartmouth College and international relations expert. \u201cOther countries are often deeply unenthusiastic about telling their firms\u2014which are positioned to bring in a lot of revenue, which they use for future innovation\u2014that they cannot export to Country X<\/a> or Country Y.\u201d<\/p>\n

This translates to \u201crefusing to participate in export controls or to devoting little or no effort to ensuring that their firms are adhering to the controls,\u201d she says.<\/p>\n

\u00a0Paul Triolo, a partner at the DGA-Albright Stonebridge Group, points out that \u201cJapanese and Dutch officials during the Biden administration resisted any serious alignment with U.S. controls,\u201d and suggests that U.S allies \u201cwill be glad to see a major stepping back from controls.\u201d<\/p>\n

Ongoing trade negotiations between the U.S. and its trading partners could weaken export controls further.\u00a0<\/p>\n

Chinese officials may demand a rollback of chip sanctions as part of a grand bargain between Washington and Beijing, similar to how the U.S. agreed to grant export licenses to Nvidia and AMD in exchange for China loosening its controls on rare earth magnets.\u00a0<\/p>\n

Japan and South Korea may also bring up the chip controls as part of their own trade negotiations with Trump.\u00a0<\/p>\n

\u2018Expect continuing diversions\u2019<\/p>\n

A separate issue are controls over the transfer of Nvidia GPUs. The U.S. has leaned on governments like Singapore, Malaysia and the United Arab Emirates to prevent advanced Nvidia processors from making their way to China.<\/p>\n

Scrutiny picked up in the wake of DeepSeek\u2019s surprise AI release earlier this year, amid allegations that the Hangzhou-based startup had trained its powerful models on Nvidia processors that were subject to export controls. (The startup claims that it acquired its processors before export controls came into effect).<\/p>\n

As of now, the two chips allowed to be sold in China\u2013Nvidia\u2019s H20 and AMD\u2019s MI308\u2013are not the most powerful AI chips on the market. The leading-edge processors, like Nvidia\u2019s Blackwell chip, cannot be sold to China.\u00a0<\/p>\n

That means chip smuggling will continue to be a concern for the U.S. government. Yet \u201cenforcement will be spotty,\u201d Triolo says. \u201cThe Commerce Department lacks resources to track GPUs globally, hence expect continuing diversions of limited amounts of GPUs to China via Thailand, Malaysia, and other jurisdictions.\u201d<\/p>\n

Triolo is, instead, focused on another loophole in the export control regime: Chinese firms accessing AI chips based in overseas data centers. \u201cThere is no sign that the Trump Commerce Department is gearing up to try and close this gaping loophole in U.S. efforts to limit Chinese access to advanced compute,\u201d he says.\u00a0<\/p>\n

How much will the global supply chain change?<\/p>\n

Not all analysts think we\u2019ll see a complete unraveling of the export control regime.<\/p>\n

\u201cThe controls involve a complex multinational coalition that all parties will be hesitant to disrupt, given how uncertain the results will be,\u201d says Chris Miller, author of Chip War: The Fight for the World\u2019s Most Critical Technology. He adds that many of these chipmakers and suppliers don\u2019t have the same political heft as Nvidia, the world\u2019s most valuable company.\u00a0<\/p>\n

Yet while these companies may not be as politically savvy as Nvidia, they\u2019re just as important. TSMC, for example, is the only company that can manufacture the newest generation of advanced chips; ASML is the only supplier of the extreme ultraviolet lithography machines used to make the smallest semiconductors.\u00a0<\/p>\n

\u201cI don\u2019t believe it\u2019s leverage that the Trump administration will easily give away,\u201d says Ray Wang, a semiconductor researcher at the Futurum Group.<\/p>\n

Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Donald Trump\u2019s decision to let Nvidia and AMD export AI processors to China in exchange for a cut…\n","protected":false},"author":2,"featured_media":76291,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[276,45,49,48,95,37054,1376,15258,6494,36103],"class_list":["post-76290","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-artificial-intelligence","tag-business","tag-ca","tag-canada","tag-china","tag-chips","tag-donald-trump","tag-gpu","tag-nvidia","tag-semiconductors"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/76290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=76290"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/76290\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/76291"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=76290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=76290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=76290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}