Ever since Trump’s presidency, there has been an on-and-off trade war between the United States and China. It all started in 2018 with new American trade tariffs on goods related to green technology like solar panels and electric vehicles. Under Trump, the trade war continued to ramp up with steel and aluminum tariffs Initiated, all with the end goal of preventing China from stealing American technology
With the election of Joe Biden, some hoped for a renewed focus on restoring relations with China and ending the trade war. However, under President Biden, there has been no end to Trump-era tariffs and the Democrat administration has put forth new actions to punish and prevent China from continuing what they saw as intellectual property theft.
In October 2022, a new list of sanctions came out to block Chinese tech companies like Huawei, and also blocking the sale of powerful chips made by companies like NVIDIA to China. This has been the most recent step taken by the United States government to put a limit on the availability of cutting-edge semiconductors in China. This is done with the fear of Chinese artificial intelligence development, rising Chinese tensions in the South China Sea, and Chinese threats to the largest cutting-edge semiconductors of them all, Taiwan.
Even as more restrictions come in the way of technology sales, China is still one of the biggest marketplaces on the planet. NVIDIA quickly began working on workarounds with a less powerful chip, made specifically for the Chinese market. The less powerful chip allowed NVIDIA to keep its large market share in China even as the trite regulations came into effect.
Publicly, AMD did not announce anything related to a weaker chip for China, so the recent news of AMD being blocked by the Commerce Department to be sold to China was the first way the new chip made its way into the public eye. Even though AMD made a far weaker chip, U.S. officials still told AMD that the chip was too powerful to be sold in China, and the company must obtain a green light from the Commerce Department.
Even though the news of an AMD chip being made to be sold in the Chinese market was good news for many, AMD shares still fell 3% in the pre-market as the sale was still blocked by the Commerce Department. It is clear to many that now, AMD is gearing up to be a real competitor against NVIDIA in the AI chip market. Right before this, in December, AMD launched a new MI300 to compete with processors from NVIDIA in the West. As the Chinese-tailored chip is still facing roadblocks it is unsure how long it would take for AMD to secure a license from the Commerce Department and begin selling chips in China once more, but when the time comes it will be a new chapter in the AMD vs NVIDIA chip war and a footnote in the China-U.S. trade war.