Nvidia and Advanced Micro Devices (AMD) have reached an agreement with the US government to share part of their earnings from chip sales in China. Under the deal, both companies will pay 15% of their China chip sales revenue to the US in order to secure export licenses.
According to a person familiar with the agreement, Nvidia will share revenue from its H20 artificial intelligence chips sold in China, while AMD will give the same percentage from sales of its MI308 chips.
A spokesperson for Nvidia said the company follows all US export regulations and has not shipped H20 chips to China for several months. They added that the company hopes these rules will make it possible for American chipmakers to compete fairly in the Chinese market. AMD has not yet commented on the matter.
Chinese Chipmakers Gain from Domestic Demand Despite Tariffs
Chinese semiconductor manufacturers are benefiting more than expected from rising domestic demand, according to Morningstar analyst Phelix Lee. U.S. tariffs have not hurt their full-year outlook as much as feared, and both SMIC and Hua Hong Semiconductor saw a boost in the second quarter by ramping up production ahead of higher tariffs. Lee noted that faster upgrade cycles in Chinese consumer goods and growing market share in electric vehicles, networking, and industrial equipment are driving their optimism.
Despite their positive outlook, both companies still depend on external financing for expansion, and their stocks remain overvalued. On Tuesday, SMIC’s H-shares slipped 1%, while Hua Hong’s shares dropped 5%.
In a separate development, Intel CEO Lip-Bu Tan is expected to visit the White House on Monday. This follows President Donald Trump’s recent call for Tan’s removal over his business links to Chinese companies, as reported by the Wall Street Journal.
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