U.S.' new chip sanctions will hurt Taiwan suppliers: Analysts

Taipei, April 17 (CNA) The United States' latest decision to impose a fresh round of sanctions on exports to China by major American artificial intelligence design companies is expected to hurt their suppliers, including those in Taiwan, according to analysts.

Liu Pei-chen (劉佩真), a researcher at the Taiwan Industry Economics Database, said on Wednesday that the U.S.' new licensing requirements for exports to China by Nvidia Corp. and Advanced Micro Devices, Inc. (AMD) will further hamper the two AI design heavyweights.

In turn, Taiwanese suppliers to these two American companies will also be impacted, Liu told CNA on Wednesday.

She was commenting on the U.S. Department of Commerce's (DOC) new export licensing requirements, announced hours earlier, for Nvidia's H20 and AMD's MI308 chips, which are critical to AI development.

In a statement, a DOC spokesperson said the department is committed to implementing U.S. President Donald Trump's policies to safeguard national and economic security.

An industrial expert, who spoke on condition of anonymity, told CNA later that day that the latest sanctions were "ridiculous," as the H20 and MI308 chips were designed to comply with U.S. restrictions on exports to China.

The expert expressed the view that China is unlikely to be heavily affected by the new sanctions in the short term, as many Chinese buyers have reportedly built up large inventories of H20 and MI308 chips.

The bulk of the financial burden will be borne by Nvidia and AMD, the expert said.

The U.S.' move to further restrict chip exports to China will prompt Chinese chipmakers to speed up production of chips similar to those made in the U.S., the expert added.

Citing the example of the Ascend 910B processor, which is close to Nvidia's H20 in terms of efficiency and manufactured by the Chinese company Huawei, the expert said that such efforts could accelerate China's progress toward self-sufficiency.

In short, the expert said, the new sanctions are likely to bolster China's semiconductor industry, which would harm not only Nvidia and AMD but also their Taiwanese suppliers.

According to local news analyses on Thursday, the Taiwanese companies most likely to be affected include AI server makers such as Inventec Corp. and Mitac Holdings Corp., which supply Chinese cloud service providers like Baidu, Alibaba, and Tencent.

On Tuesday, Nvidia said it will book a quarterly charge of about US$5.5 billion tied to restrictions on exports of its H20 GPUs to China and other destinations.

In 2024, the company generated an estimated US$12 billion to US$15 billion in revenue from its H20 GPUs, according to international business news reports.

Meanwhile, AMD announced Wednesday that it would book charges of about US$800 million related to the sales restrictions imposed on its MI308 GPUs.

In the wake of the new sanctions amid escalating trade tensions between the U.S. and China, the Taiex -- the weighted index on the Taiwan Stock Exchange -- fell 1.96 percent to 19,468.00 on Wednesday, as the bellwether electronics sector tumbled 2.27 percent.