Image: © Oleksii /Stock.adobe.com
Trade tensions between the US and China have been simmering for months.
The Chinese State Administration for Market Regulation has launched an investigation into Nvidia, the US chipmaker, for allegedly violating the country’s antitrust laws during its 2020 acquisition of the Israel-based Mellanox Technologies.
According to the Chinese watchdog, Nvidia, through its $7bn acquisition of Mellanox, a high-speed server manufacturer, is suspected of violating the country’s antimonopoly laws.
However, in its announcement yesterday (9 December), the watchdog did not specify how the acquisition may have potentially broken any laws. The watchdog had approved the deal in 2020 with the conditions that the two companies could not mandate bundling or attach any other “unreasonable trading conditions” when selling hardware in China.
Last month, Nvidia overtook Apple to become the world’s largest company, with a valuation of more than $3.4trn. However, following China’s probe announcement yesterday, the company’s share prices took a hit of more than 2.5pc with ongoing effects.
The investigation comes during turbulent times between China and the US – with the US placing its third clampdown on the Chinese semiconductor industry in three years, which it said is designed to “further impair the People’s Republic of China’s capability to produce advanced-node semiconductors”.
The newest US regulations, announced earlier this month, will prevent China from accessing certain types of chip-manufacturing equipment and software programs, while placing restrictions on selling high-bandwidth memory, an advanced kind of 3D-stacked computer memory used in customised AI chips to China.
In response, the Chinese government, citing “national security” concerns, announced that it will ban the export of key components involved in semiconductor manufacturing to the US.
US president-elect Donald Trump has had a hard-line approach towards China for years. His second-term cabinet selection consists of several ‘China hawks’, including the former director of National Intelligence John Ratcliffe as the head the CIA, Fox News host Pete Hegseth as the secretary of defence, and Florida congressperson Michael Waltz as national security adviser.
The stock prices of some of the biggest global chipmakers, including ASML, Nvidia and AMD took a hit earlier this year as a result of geopolitical tensions between the two countries that rose amidst reports that the US was considering tighter restrictions for exports of advanced semiconductor technology to China.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.
