Analysts said that Trump's move might hand the chip market over to China.
The Trump administration tried to curb China's progress in artificial intelligence by preventing American companies from exporting chips to China, but some independent experts and analysts said this move would exact a heavy price on the United States.
Agence France-Presse quoted independent analyst Jack Gold saying, "The nation will suffer greater losses than individual companies." In the view of this independent analyst and other experts, the new restrictions imposed on American chip giants are a "major victory" for the Chinese government.
This analyst told Agence France-Presse that without access to American semiconductors necessary for developing artificial intelligence technology, China will have no choice but to double down on designing its own cutting-edge chips. He believed, "Once it gains competitiveness, it will start selling worldwide. Once the supply chain changes, regaining the market will be extremely difficult."
Another independent industry expert, Rob Endler, also believed, "This is the fastest way for the U.S. to give up its leading position in microprocessors."
In the short term, these measures caused shares of NVIDIA and Advanced Micro Devices (AMD) to plummet this week, resulting in billions of dollars in losses.
NVIDIA became a pioneer of the artificial intelligence wave thanks to its advanced GPUs (graphics cards), and it is expected to incur an one-time expense of $5.5 billion this quarter alone. AMD announced an $800 million funding gap.
During the Biden administration, Washington had already restricted the export of the most advanced semiconductor products to China to maintain the U.S.'s leading position in this field and prevent Beijing from accessing certain military application software.
But Jack Gold believed, "Export controls differ from what Donald Trump now calls a total blockade."
The new restrictions mainly involve the H20 chip, which was specifically designed by NVIDIA for sale in China.
White House made this decision due to the success of the Chinese startup DeepSeek, which successfully built AI models comparable to those of OpenAI (ChatGPT) and other leading American companies using fewer and less advanced components, including the H20 chip.
Jack Gold lamented that Trump "might think that if we create more difficulties for China and other countries, we will magically win." He added, "This makes no sense. In my opinion, the right approach is to support American companies instead of punishing them, thus slowing their own investments in R&D."
These restrictive measures under the Trump administration were introduced against the backdrop of its trade war, with the aim of shifting the production of important electronic components to the United States.
Jack Gold believed that Trump "said he would bring factories back to the U.S. This won't work. But let's assume he's right. Building a new foundry requires $20 to $40 billion and takes 3 to 4 years. During this period, do we need to pay additional tariffs?"
While visiting Beijing and meeting with senior executives on Thursday, Jensen Huang, CEO of NVIDIA, expressed hope to "continue maintaining strong influence in China," stating that China is a "very important market" for his company. In 2024, NVIDIA's sales in China reached $17 billion, accounting for 13% of its global revenue.
Huang stated this week that NVIDIA will produce AI supercomputer chips entirely in the U.S. for the first time. However, Jacob Burn, an analyst at eMarketer, said that the U.S. "does not have the skilled labor force." And "this situation is unlikely to improve under the anti-immigrant policies of the Trump administration."
In addition, chip production requires rare earth materials, where China holds all the advantages. This expert pointed out, "Indeed, the U.S. has mineral deposits. But the U.S. lacks expertise, mining infrastructure, and costs will be higher due to tariffs."
He also said that mining these deposits would impact the environment. "Therefore, we can expect some dissenting voices."
Original source: https://www.toutiao.com/article/1829966863286284/
Disclaimer: The article represents the views of the author only.