Broader talks between the US and China may have opened up the chip trade, but there still remains a strong underlying distrust between the two countries, which is apparent in latest reports of China voicing security concerns over US-made computer chips.
US President Donald Trump recently approved sales of US-based technology giant Nvidia’s H20 chips to China after imposing a suspension on their trade in April, but with the condition that the company pays 15 per cent tax on those sales to the US administration.
Chip maker Advanced Micro Devices (AMD) was also told to pay the same tax on its sales of its MI380 chips to China.
While Nvidia CEO, Jensen Huang, said he appreciated being able to sell H20s to China, Chinese internet watchdog, the Cyberspace Administration of China, recently posted a notice on its website referring to alleged “serious security issues” with Nvidia's computer chips.
Also Read: Nvidia to start exporting AI chips to China
In Taiwan on Friday, Huang allayed the Chinese governments fears and said his firm was in talks with the Trump administration for a potential new chip designed for China – the B30A – a semiconductor for artificial intelligence data centres in the Red Dragon.
Huang also met with Taiwan Semiconductor Manufacturing Corp, the world’s largest chip maker and Nvidia’s key manufacturing partner.
“I'm offering a new product to China for ... AI data centres, the follow-on to H20,” Huang said, adding, “That's not our decision to make… It's up to, of course, the United States government [to allow sales of these chips]. And we're in dialogue with them, but it's too soon to know.”
The B30A is based on California-based Nvidia's specialised Blackwell technology, and reported to operate at about half the speed of Nvidia's main B300 chips. It’s a graphics processing unit or GPU, which is a type of device used to build and update a range of AI systems.
However, they are less powerful than Nvidia's top semiconductors of today, which cannot be sold to China due to US national security restrictions.
The trade-off between Beijing and Washington comprised exchange of computer chips for rare earth magnets from China, although it is common knowledge that the US will not sell its best software technology to China.
Unconfirmed reports said Chinese authorities were also unhappy over comments by US Commerce Secretary Howard Lutnick suggesting the US was only selling outdated chips to China.
Speaking on CNBC, Lutnick had said the US strategy was to keep China reliant on American chip technology. “We don't sell them our best stuff,” he said. “Not our second-best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool,” he said.
Huang, who had lobbied hard for resuming sales of H20 chips to China, assured Chinese authorities those chips posed no “backdoor” security risk.
“We have made it very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient,” he said, adding Nvidia was “surprised” by the accusation about the chips having “mature tracking and location and remote shutdown technologies”, as stated by US experts on AI.
“As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved,” Huang said.
China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor know-how for much of what it produces.
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