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Due to their high quality craftsmanship, Nvidia (NVDA) and AMD are two of the leading US chip makers in the tech industry due to their high quality craftsmanship.
Recently, the US government gave the tech giants orders to stop selling their technology in China, despite China being one of their main customers.
The reason for this is that their technology can be used for artificial intelligence.
The order
On Wednesday, the two chip makers announced that the US government had ordered them to stop exporting high-quality chips to the world’s second-largest economy.
Nvidia
Nvidia shared a filing request in which US officials explained the decision was made on a potential risk of the products being used or diverted to a “military end user”.
The limitation falls on Nvidia’s A100 and its upcoming H100 ICs, along with any systems that contain the two chips.
According to the company, the order is effective immediately.
How does this affect sales?
According to the filing, the decision could wipe out $ 400 million in deals for the company.
The numbers were compiled last week by the California-based tech giant as they discussed potential sales in China.
Therefore, your projection may be affected by the new requirement.
Both companies also suffered, with Nvidia shares down 6.6% in after-hour trading on Wednesday. Meanwhile, AMD stock is down 3.7%.
Nvidia is currently working with its customers in China to try to “satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren’t sufficient.”
AMD
AMD also received new requirements from the US Department of Commerce, which will affect shipments of its MI250 ICs to China.
The company released a statement on a different set of components, stating:
“At this time, we do not believe that shipments of MI100 integrated circuits are impacted by the new requirements.”
“We do not currently believe it is a material impact on our business.”
Tensions between the United States and China
Order and Demand shows how tensions between the United States and China overshadow the trade and technology industries, among others.
The two countries recently agreed to review U.S.-listed Chinese companies that have offered a breakthrough in their relationship.
Despite the progress, experts have warned that the deal will only play a minor role in addressing other important issues.
Nvidia and AMD orders also extend export bans to Russia.
The two companies said they currently do not sell any products there, as they stopped selling after the invasion of Ukraine earlier in the year.
Read also: Chinese students not as keen to study in the US, could affect the country’s economy
China responds
News of the decision reached the Chinese authorities, who opposed the decision.
State media called out to the United States and said:
“Actions from the United States deviated from the principle of fair competition and violated international economic and trade rules.”
Beijing also issued a statement saying:
“The US side should immediately stop its wrongdoing, treat companies from all over the world including China fairly, and do more things that are conducive to the stability of the world economy.”
Meanwhile, the US Department of Commerce responded to his statement.
“We are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and users to protect US national security and forreign policy interests,” said a Commerce Department spokesperson.
“This includes preventing China’s acquisition and use of US technology in the context of its military-civil fusion program to fuel its military modernisation efforts, conduct human rights abuses, and enable other malign activities.”
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