Trump Nvidia, AMD China chip revenue deal implications
Nvidia And AMD According to several reports, according to several reports, which led to controversy about whether the movement could affect Chip Giants’ business and that Washington could make similar agreements, they agreed to share some of their income from sale to China with the US government.
In exchange for 15% of the revenues obtained from CHIP sales, two semiconductor companies will receive export licenses to sell Nvidia’s H20 and AMD’s MI308 chips in China Financial times.
NVIDIA, NVIDIA said in a statement, “We follow the rules set by the US government for our participation in world markets. Although we have not sent H20 to China for months, we hope that export control rules will allow the United States to compete in China and worldwide.” He said. “America cannot repeat 5G and can not lose telecommunication leadership.
CNBC reached AMD and the White House for a comment.
Analysts told CNBC, US President Donald Trump’s management “unusual”. In the meantime, investors see the movement as a broad positive for both Nvidia and AMD, which once again makes access to the Chinese market safely.
What does it mean for Nvidia and AMD?
Nvidia’s H20 is a specially created chip to meet the export requirements to China. Previously, it was banned under export pavements, but the company said it expects a license to send the product last month. Chinese.
In July, AMD, MI308 chips will continue to export, he said.
At that time, there was no suggestion that the re -start of sales to China would come with conditions or any loss of income, and my name was celebrated by markets due to potential sales worth billions of dollars to China.
On Monday, Nvidia and AMD shares have only been traded slightly lower in pre -market transactions, and emphasized how investors believe that the latest development is not a significant negative for companies.
“Investor perspective, still clear positive, 85% of the income better than zero,” Quilter Cheviot global technology analyst Ben Barringer. He said.
“Question, Nvidia and AMD’nin prices to take into account the prices of 15% will be set to set, but ultimately better to deliver the market to Huawei better to sell to the market better.”
Huawei Nvidia and AMD’s closest Chinese rival.
Nevertheless, uncertainty appears in the long run for both US companies.
“The agreement in the short term gives both companies to China for their export to China. We don’t know if the US government wants to make a greater deduction than Chinese affairs in the long run.
Trump is likely to lead to similar agreements
More than one analyst told CNBC that the agreement was “unusual”, but was almost equal to Trump.
“Although it is a strange development, it feels like a good development and an arrangement that you can expect from the President Trump, who is an agreement maker in his heart. It is willing to give, but only if it gets something in return and this is absolutely unusual.” He said.
Compoint Research’s partner Neil Shah said the income deduction was equivalent to the “indirect tariff in the source”.
Futurum Group CEO Daniel Newman Published on X on Sunday The movement is a kind of ‘tax’ to do business in China.
However, it is not possible to cut such agreements for other companies.
“I do not expect to spread to other sectors that are important for the US economy Like software and services, “Nick Patience has established a leadership for the AI in the Futurum Group.
Considering that they support many vehicles such as artificial intelligence, consumer electronics and even military applications, semiconductors see semiconductors as a strategic technology. Therefore, unlike any other product, the US put chips under an export control regime.
“Semiconductor is a very unique job and the game payment tactic may work for Nvidia and AMD, because the US GOV is about getting export approval.” He said.
“Other jobs such as Apple and Meta can be more complex when it comes to business models and services for China.”
How can China react
Semiconductors have become a very sensitive geopolitical issue. For the last two weeks, China has increased concerns about the security of Nvidia’s chips.
China’s newspaper Global Times, operated by the state, hit Washington’s tactics, referring to an expert.
“This approach means that the US government has rejected the original security reason to print the US government producers to China through economic leverage.” He said.
The Chinese government has not yet commented on the reported income agreement.
Trump’s agreement with Nvidia and AMD will probably confuse mixed emotions in China. On the one hand, China will not be satisfied with the regulation. On the other hand, Chinese companies will probably want to take their hands to these chips to continue their own AI capabilities.
Research Research Shah, “For China, AI is an enigma for needing these chips to advance their ambitions.
– Erin Doherty from CNBC contributed to this report.
