China and US trade war


[News] NVIDIA’s China-exclusive Chip H20 to Begin Production in Q2 by Wistron

In October of 2023, the U.S. government expanded its restrictions on chip exports, limiting NVIDIA from exporting certain chips to China without prior permission. Despite this, NVIDIA is not expected to relinquish the Chinese market and may commence production of the AI chip “H20,” specifically designed for China, in the second quarter of this year.

According to a report from Wccftech, there is keen interest in NVIDIA’s potential exclusive chips for China, including H20, L20, and L2, intended to replace H100, L40, and L4, catering to the AI training needs of Chinese customers.

NVIDIA is reportedly trying to accelerate its return to the Chinese AI chip market, expecting to quickly regain its advantage and market share. It is understood that the main base board supplier for the new product remains Wistron.

The orders from the relevant supply chain manufacturers’ clients will be deferred and are expected to see substantial shipments starting from the second quarter.

The report indicates that progress on these chip projects is steady, and the products fully comply with U.S. export restrictions. Production of the H20 is expected to commence in the second quarter.

Furthermore, it is reported that these GPUs were originally scheduled for release at the end of 2023 but faced delays due to the ongoing tensions between China and the US.

NVIDIA emphasized that the AI chip designed specifically for the Chinese market will fully comply with the requirements and guidelines of the U.S. Department of Commerce, subsequently enabling the launch of the GeForce RTX 4090D in China.

Industry sources estimate that NVIDIA is actively seeking to comply with U.S. government computing power regulations by further reducing the customized chip’s performance. However, due to missing a sales opportunity, many Chinese customers have begun exploring the purchase of local AI chips as an alternative to NVIDIA products.

This is primarily driven by the availability and competitive cost-effectiveness of Chinese chips, with several Chinese companies switching to Huawei products for AI training.

While NVIDIA has significantly streamlined the H20 to meet local demands in China, with computing power reduced to only 15% of the H100, the H20 still aims to strengthen its competitive advantage in specifications.

According to leaked specifications circulating online at the end of 2023, the H20 boasts a FP8 computing power of 296 TFLOPs and FP16 computing power of 148 TFLOPs, with an increased memory capacity of 96GB compared to the H100’s 80GB.

However, domestically-produced chips in China are also formidable. It is claimed that the performance of the H20 is only one-fourth that of Huawei’s HiSilicon Ascend 910B, yet its price is exceptionally high. Therefore, for some Chinese enterprises, there is still an incentive to adopt self-developed AI chips. In the future, whether the potential for domestically-produced AI chips in China can disrupt NVIDIA’s monopoly is yet to be seen.

Read more

(Photo credit: NVIDIA)

Please note that this article cites information from Wccftech


[News] Micron and Fujian Jinhua Reach Global Settlement Concerning IP Theft Lawsuits

As one of the key cases in the US-China tech war, American memory giant Micron Technology had mend relations with China. Recently, Micron said a global settlement agreement with state-backed competitor Fujian Jinhua Integrated Circuit (JHICC) concerning intellectual property theft lawsuits.

According to Bloomberg’s report, on December 24th, Micron has indicated that it has reached a global settlement agreement with Fujian Jinhua Integrated Circuit. A Micron spokesperson stated in an email, “The two companies will each globally dismiss their complaints against the other party and end all lawsuits between them.” However, no further information or details were provided.

In March of this year, the Cyberspace Administration of China conducted a cybersecurity review of Micron products, and in May, it cited cybersecurity concerns as the reason for prohibiting Chinese operators of “critical infrastructure” from using Micron’s chips.

Micron stated that the Chinese restrictions have affected approximately half of its sales related to Chinese customers. Accordingly, Micron derives about a quarter of its global revenue from China and Hong Kong.

Reportedly, industry insiders believe that following the settlement between the two parties, it is not anticipated to have a significant impact on the upward trend of memory prices.

Appeared to have attempted to pacify Beijing, Micron announced in June an increased investment in China, planning to invest over CNY 4.3 billion in the next few years in its packaging and testing facility located in Xi’an, China.

Micron has decided to acquire the packaging equipment of Powertech Semiconductor (Xi’an), planning to construct new facilities at the Micron Xi’an plant and introduce state-of-the-art and high-performance packaging and testing equipment.

In 2017, Micron filed a lawsuit in the United States against Fujian Jinhua and its Taiwanese partner United Microelectronics Corporation (UMC), accusing these two companies of stealing trade secrets related to Micron’s memory.

A year later, as the U.S. Department of Justice intensified actions against China in economic espionage cases, Fujian Jinhua and UMC were charged with conspiring to steal Micron’s trade secrets. The Trump administration at the time placed Fujian Jinhua on the so-called Entity List, prohibiting U.S. component sales to this Chinese DRAM maker.

In 2021, UMC and Micron announced a settlement. UMC admitted guilt in an agreement with U.S. prosecutors, and the prosecution agreed to drop the charges of economic espionage and conspiracy.

Nevertheless, the case against Fujian Jinhua by the US Department of Justice remains pending.

Read more

(Photo credit: Micron)

Please note that this article cites information from ChinaTimesBloomberg and UDN


[Insights] Chinese Government Invests in Huawei Supply Chain; Semiconductor Self-sufficiency for China’s Long-Term Growth

Bloomberg reported in early December 2023 that the Chinese government has been directly investing to assist Huawei in building its chip supply chain since 2019, indicating that the ongoing uncertainties in the U.S.-China trade war, the pursuit of semiconductor industry self-sufficiency is expected to be a long-term development direction for China.

TrendForce’s insight:

  1. Chinese Government Establishes Investment Fund for Huawei, Creating Exclusive Supply Chain

On May 15, 2019, when the United States announced the inclusion of Huawei and its 70 subsidiaries in the trade blacklist, the Chinese government swiftly established a fund named “Shenzhen Major Industry Investment Group” in Shenzhen, where Huawei’s headquarter is located.

This fund, directly funded by the local government, aimed primarily at creating a large supply chain for Huawei, consisting of optical factories, chip equipment developers, and chemical manufacturers.

One chip manufacturer, SiCarrier, maintained close ties with Huawei. Besides talent exchanges, the company also transferred over a dozen patented technologies to Huawei.

  1. Escalating U.S.-China Trade War Drives Long-Term Semiconductor Self-Reliance in China

Recently, the Nikkei news, in collaboration with the research company Fomalhaut Techno Solutions, conducted a renewed disassembly of Huawei’s Mate 60 Pro smartphone. The findings indicate that, based on component costs, approximately 47% of the components are manufactured in China.

This contradicts the earlier claim by Chinese media of a 90% domestic production rate. Nevertheless, the Mate 60 Pro shows a noteworthy 18% increase in domestic production compared to the Mate 40 Pro in 2020.

Additionally, during the component analysis, it was reaffirmed that the self-developed 5G processor, Kirin 9000S, featured in Huawei’s Mate 60 Pro smartphone, has a circuit width of 7nm. This demonstrates China’s semiconductor technological prowess despite restrictions imposed by the U.S. ban.

However, when the semiconductor industry value chain is divided regionally, it can be observed that in the uppermost stream of the supply chain, including electronic design automation software and licensed intellectual property used in chip design, this domain is primarily concentrated in the hands of U.S. firms.

Currently, China’s overall share in the global semiconductor value chain remains relatively low and is more concentrated in downstream packaging and manufacturing. If China aims to establish a fully “self-sufficient” semiconductor supply chain, it is estimated that there is still a long way to go.

However, what is certain is that in the ongoing U.S.-China trade war, the pursuit of semiconductor industry autonomy will be a long-term development direction for China.

Read more


[News] Foxconn Invests Over USD 1.5 Billion in Expansive Production in India, Creating a New Hub for iPhone Manufacturing

Foxconn has announced plans to invest over USD 1.5 billion in expanding its facilities in India. This substantial investment, a rarity in recent years, has sparked speculation that Foxconn is preparing for the introduction of new iPhone products in India.

Due to reports suggesting that in the second half of 2024, Apple will initiate the design, development, and trial production process for the iPhone 17 in India, if true, this would mark the first time in iPhone history that a New Product Introduction (NPI) is conducted outside of China, solidifying India as a potential global iPhone production hub.

Foxconn’s subsidiary, Foxconn Hon Hai Technology India Mega Development Private Limited, disclosed the plan to build the factory locally, with an expected investment of INR 128.209 billion (approximately USD 1.537 billion). This move is seen as a strategic effort to enhance iPhone production capacity in India.

According to TrendForce’s estimate, the proportion of iPhones produced in India is still below 10% in 2023, expected to reach 25-30% by 2025, and projected to achieve 35-40% by 2028. TrendForce believes that with the stable production base of Foxconn in India, it can indeed expand the output.

Analyst Ming-Chi Kuo from TF International Securities disclosed that Apple is placing a growing emphasis on the Indian market. The company intends to kick off the NPI process for the standard edition of the iPhone 17, slated for release in the second half of 2025, in India during the latter part of 2024.

Kuo further highlighted that this development signifies the first instance of a new iPhone model being developed outside of China. Choosing the standard version of the iPhone for development lowers the design complexity, reducing risks. This year, 75-80% of iPhones produced in India are manufactured by Foxconn.

According to a previous report by Indian media Economic Times, Foxconn’s factory in Tamil Nadu, India, has been producing the iPhone 15 Plus in the fourth quarter of this year and has already started production of the standard version of the iPhone 15.

Before the iPhone 14, only a small portion of Apple’s phones were assembled in India, with shipments lagging six to nine months behind those in mainland China. However, this year, India has officially entered the supply chain for the initial batch of new iPhones.

Foxconn’s India representative, V Lee, previously stated that the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by next year. However, no further details were provided.

In other product areas, there have been recent reports that three subsidiaries of the Foxconn Group will be among the first approved list of incentives for information technology (IT) production in India. Foxconn Group is also accelerating its layout for manufacturing and components in India.

(Photo credit: Apple)


[News] NVIDIA Confirms Development of “Compliance Chips” for the Chinese Market

According to IJIWEI’s report, NVIDIA recently confirmed that it is actively working on new “compliant chips” tailored for the Chinese market. However, these products are not expected to make a substantial contribution to fourth-quarter revenue.

On November 21, during NVIDIA’s earnings briefing for the third quarter of 2024, executives acknowledged the significant impact of tightened U.S. export controls on AI. They anticipated a significant decline in data center revenue from China and other affected countries/regions in the fourth quarter. The controls were noted to have a clear negative impact on NVIDIA’s business in China, and this effect is expected to persist in the long term.

NVIDIA’s Chief Financial Officer, Colette Kress, also noted that the company anticipates a significant decline in sales in China and the Middle East during the fourth quarter of the 2024 fiscal year. However, she expressed confidence that robust growth in other regions would be sufficient to offset this decline.

Kress mentioned that NVIDIA is collaborating with some customers in China and the Middle East to obtain U.S. government approval for selling high-performance products. Simultaneously, NVIDIA is attempting to develop new data center products that comply with U.S. government policies and do not require licenses. However, the impact of these products on fourth-quarter sales is not expected to materialize immediately.

Previous reports suggested that NVIDIA has developed the latest series of computational chips, including HGX H20, L20 PCIe, and L2 PCIe, specifically designed for the Chinese market. These chips are modified versions of H100, ensuring compliance with relevant U.S. regulations.

As of now, Chinese domestic manufacturers have not received samples of H20, and they may not be available until the end of this month or mid-next month at the earliest. IJIWEI’s report has indicated that insiders have revealed the possibility of further policy modifications by the U.S., a factor that NVIDIA is likely taking into consideration.

Read more

(Photo credit: Nvidia)

  • Page 1
  • 3 page(s)
  • 15 result(s)