Chip war. China investigates possible Nvidia monopoly

As part of the agreement, Nvidia had also agreed to give Chinese chipmakers the opportunity to ensure that all their products would work well with Mellanox technology, which has been called into question with this investigation.

This case demonstrates the difficulties that Nvidia has had in developing cutting-edge Artificial Intelligence chips that comply with both US government controls, but also provide some capacity to Chinese customers to work with critical technology.

It should be noted that the United States has also initiated antitrust investigations against Nvidia. At the beginning of the year, the Department of Justice of that country requested information from the company to analyze its leadership in the chip industry.

According to statements from antitrust officials, Nvidia has raised concerns that it would make it difficult for other suppliers to switch and penalize buyers who do not exclusively use its AI chips.

United States vs China in chips

Semiconductors have become one of the most important battlefields today. In mid-November, the United States Department of Commerce ordered Taiwan Semiconductor Manufacturing Company (TSMC) to stop shipping advanced AI chips to Chinese customers.

The decision to block shipments to China came after TSMC informed the Commerce Department that one of its chips had been found in a Huawei processor, which was a violation of export controls on technology products.

In response, a few days ago China announced restrictions on exports to the United States of essential components for the manufacture of electronic semiconductors.

Among the affected materials are gallium, antimony and germanium, the Chinese Ministry of Commerce detailed in a statement. These metals can be used in dual technologies, that is, those that can be deployed for both civil and military purposes.

Exports of graphite, another key component of semiconductors, will also be subject “to stricter reviews of uses and end users,” the ministry said.

“To safeguard national security interests and comply with international obligations such as non-proliferation, China has decided to strengthen export controls on dual-use items to the United States,” he justified.

From now on, any sale to the United States of these components must have a license from the Chinese administration. Furthermore, all exports “with military uses” are strictly prohibited.