Analysts Warn US Could Be Handing Chip Market to China

AFP/APP

San Francisco: As the Trump administration attempts to choke off exports of strategically important computer chips to China, experts warn the move could backfire — potentially accelerating innovation among Chinese tech firms and helping them dominate the global semiconductor market.

“What’s actually happening is that the US government right now is handing China a big win as it tries to get their own chip business going,” said Jack Gold, principal analyst at J. Gold Associates.

“Once they’re competitive,” he told AFP, “they’ll start selling around the world and people will buy their chips.”

Gold added that once that happens, it will be difficult for US chipmakers to reclaim lost market share.

Silicon Valley giants Nvidia and AMD are already bracing for the fallout. Both companies notified regulators this week that they expect significant financial impacts from the new US licensing requirements for semiconductor exports to China.

According to filings with the US Securities and Exchange Commission (SEC):

• Nvidia estimates the new rules could cost the company $5.5 billion.
• AMD forecasts a potential loss of up to $800 million due to the restrictions.

Administration officials informed Nvidia that it must obtain special licenses to export its H20 chips to China, citing concerns that the hardware might be used in Chinese supercomputers.

The US had already restricted exports to China — the world’s largest chip buyer — of Nvidia’s most advanced graphics processing units (GPUs), which are essential for powering cutting-edge artificial intelligence models.

Nvidia specifically developed the H20 chip to serve the Chinese market, aiming to meet previous US export regulations while maximizing performance. However, the new licensing requirements now pose a major hurdle, Gold noted.

Meanwhile, AMD stated that the new controls affect its MI308 GPUs, which are designed for high-performance tasks such as AI and gaming. The company warned in its filing that there is no guarantee US authorities will approve the necessary export licenses.