(AWP) US chip manufacturers are no longer allowed to supply high-performance chips to China due to new instructions from US authorities. The limitations affect semiconductors primarily used in artificial intelligence (AI) applications, such as US chip company Nvidia (NVDA 132.78 -12.03%) and Advanced Micro Devices (AMD). The US Commerce Department said it wanted to “prevent advanced technology from falling into the wrong hands” and “protect the national security and interests of US foreign policy,” and did not comment on the criteria set for the ban. The move signals a new escalation in the US-China row over the fate of Taiwan, where Nvidia and several other manufacturers make their chips.
An AMD spokesperson said the group has received new licensing regulations and, among other things, is not allowed to ship MI250 chips to China designed for AI applications. However, one does not assume that the new requirements will have a significant impact on the business. On the other hand, Rival Nvidia said, the ban could hinder the development of the flagship H100 chip, which was announced earlier this year. Nvidia shares fell 6.6% in after-hours trading, while AMD shares fell 3.7%.
Without US chips, Chinese companies would lose the ability to cheaply and quickly process image and speech recognition data. Technologies are not only pervasive in consumer applications. They are also used in the military field – for example, to search satellite images for weapons or bases and to filter digital communications to gather intelligence.
China considers Taiwan a breakaway province and threatens consequences for any country that maintains contacts with the democratically governed island. The government in Beijing recently held military exercises around Taiwan after prominent US politician Nancy Pelosi visited Taiwan.
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