A smartphone with the AMD logo displayed on a computer motherboard is placed in this illustration taken on March 6, 2023.
Dado Rovik | Reuters
American Semiconductor Corporation Advanced micro devices Bloomberg reported on Tuesday that Huawei failed to have an artificial intelligence chip made for China approved by US regulators and will need to apply for an export license.
The report said AMD designed the chip to have lower performance than its premium products in order to comply with US export restrictions. But Bloomberg reported that the Commerce Department did not allow the chip to be sold in China because it is still too advanced.
AMD will now have to obtain a license from the ministry's Bureau of Industry and Security, the report said.
It is not clear whether the company will apply for the license. AMD and the Bureau of Industry and Commercial Security did not immediately respond to CNBC's requests for comment.
While the United States has restricted sales of products containing the country's most advanced semiconductor technologies to China, citing national security concerns, American companies have continued to sell mature or less advanced technologies to the huge market without licenses.
AMD's products include chips that can be used to develop and train artificial intelligence models, something US officials have warned Beijing could use to gain military advantages.
In 2022, the administration of US President Joe Biden unveiled an initial set of export controls to limit China's access to advanced semiconductor technologies. A leading company in the field of artificial intelligence chips Nvidia It later said it would sell decelerated versions of its premium AI chips that comply with US restrictions.
However, these chips were also banned in October, when the US expanded restrictions to include more targeted technology and chips that were seen as circumventing controls.
Nvidia has since redesigned the products to be less powerful for the Chinese market to comply with 2023 restrictions.
In the run-up to the October restrictions, Nvidia warned that further restrictions on US exports of its chips to China would risk a “permanent loss” for US semiconductor companies to lead one of the world's largest markets.
On Nvidia's November earnings call, CFO Colette Kress said China and other regions targeted by U.S. export controls have consistently contributed about 20% to 25% of data center revenue over the past few quarters. While Nvidia reported impressive Q4 results, Chris noted during a February earnings call that data center revenue from China declined significantly following US export restrictions.
Compared to Nvidia, AMD had a smaller foothold in the Chinese AI chip market before trade restrictions. But the company has begun targeting the AI chip market more aggressively, launching a new MI300 product line that is seen as a challenge to Nvidia's GPU products.
It's not clear which Chinese customers AMD designed the chips for. Some leading Chinese tech giants, such as Tencent, have reportedly stockpiled enough advanced chips from Nvidia to train the capabilities of their chatbots for “at least a few more generations.”
Meanwhile, US-sanctioned Huawei is reportedly developing its own chips and chip-making tools, alongside other local companies, as Chinese companies try to fill the gap created by US restrictions.
Despite restrictions on sales to China, shares of both Nvidia and AMD rose amid the AI craze. Nvidia is up more than 250% in the past year while AMD is up more than 150%.
Read the full report from Bloomberg.
