Nvidia's H20 and AMD's MI308 chips have become crucial for export licenses to China. Despite a 15% US tax, the Chinese market remains attractive, as it represents substantial potential revenue. Although this deal allows access, it imposes constraints that lower profit margins. The US aims to balance maintaining market share for American companies while controlling advanced semiconductor exports, generating tax revenue. This concession permits Chinese purchases of US chips in a second-tier category, while advanced models stay restricted, reflecting China's rise in the semiconductor sector.
This arrangement comes less than two months after Washington eased certain export restrictions on semiconductors to the Chinese market. The deal covers Nvidia's H20 and AMD's MI308 chips, both now prerequisites for securing export licenses, allowing the companies to access a market that remains lucrative despite the new 15% US curb.
Under the agreement, the direct skim from sales will meaningfully compress profit margins, effectively operating as an unconventional levy. Washington frames the move as a balancing act that is preserving American firms' ability to grow market share while maintaining oversight on the flow of advanced semiconductors.
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