Banned US Computer Chips in High Demand in China

Some of China’s top research and educational organizations depend on U.S. computing chips that have export restrictions on them, news reports say.

U.S.-based chip maker Nvidia said last week it had been told by American officials it could no longer export two top computer chips to China, Hong Kong or Russia.

The high-end chips are designed to help power major computer data centers and support artificial intelligence (AI) systems.

U.S. officials have said the export restrictions are necessary to limit the spread of chip technology that can be used for weapons. The restrictions do not affect Nvidia’s better-known products widely used in video games and automotive technology.

Nvidia said the export ban affects its A100 and H100 chips, which are designed to add more power to machine learning operations. The company’s H100 chip is still in development. Nvidia said in an official financial report that the export restriction could halt progress on the H100 chip. The company said the ban may also require the company to move some of its operations out of China.

Another American chip maker, Advanced Micro Devices (AMD), has confirmed that it also received an order from the U.S. Department of Commerce to block shipments of some of its high-end chips to China and Russia. AMD, however, said the restrictions were not expected to delay any product development or greatly harm its business operations.

China criticized the U.S. export restrictions. It accuses U.S. officials of misusing export controls to limit high-end chip sales to China. A spokesperson for China’s Commerce Ministry warned the trade limits would worsen supply chain problems and slow world economic recovery efforts after the COVID-19 pandemic.

Computer chips are China’s largest import. China’s concern about computer chips grew over the last two years as work at chip factories slowed because of COVID-19.

Reuters news agency recently examined corporate payment data over the past two years in an effort to see the level of demand for the restricted chips in China.

During the examination, reporters discovered China’s Tsinghua University spent over $400,000 last October on two Nvidia AI supercomputers. Each of the computers is powered by four A100 chips, corporate financial data showed. Tsinghua is one of China’s highest-ranked higher education institutions.

In the same month, China’s Institute of Computing Technology spent about $250,000 on A100 chips. The institute is part of the country’s top research group, the Chinese Academy of Sciences (CAS).

The school of artificial intelligence at a CAS university spent about $200,000 on high-tech equipment in July, the Reuters report shows. The equipment included a server partly powered by A100 chips.

And in November, the cybersecurity college of Guangdong-based Jinan University spent more than $93,000 on an Nvidia AI supercomputer. In addition, the university’s school of intelligent systems science and engineering spent nearly $100,000 just last month on eight A100 chips.

Other institutes and universities supported by local and area governments also bought A100 chips, the Reuters report showed.

None of the research departments contacted by Reuters answered requests seeking comment on the chip restrictions.

Nvidia also did not answer a request for comment. But it recently said it had reported $400 million in Chinese sales of the affected chips for the three- month period ending in September. The company said much of that business could be lost if its customers decide not to buy other Nvidia product offerings. Nvidia also said it planned to seek exemptions to the new rules.

I’m Bryan Lynn.

The Associated Press and Reuters reported on this story. Bryan Lynn adapted the reports for VOA Learning English.

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Words in This Story

chip n. a small piece of semiconducting material used to make parts that help power computer processors

high-end adj. (business) a class of products that are costlier and of better quality than similar, less costly products

artificial intelligence n. the development of computer systems with the ability to perform work that normally requires human intelligence

institution n. a large and important organization

supply chain n. the system of people and things that gets a product from its place of manufacture to the person who buys it

customer n. a person or company that buys goods and services

exemption n. special permission not to have to do something or pay something

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