China’s Xi speaks with Trump by phone, discusses Taiwan and bilateral ties
Investing.com-- Chinese chipmaking stocks fell on Monday following a report that the Donald Trump administration was considering allowing Nvidia to sell an advanced artificial intelligence chip in the country.
Semiconductor Manufacturing International Corp (HK:0981), China’s largest chipmaker by capacity, slid as much as 7%, while AI chipmaker Cambricon Technologies Corp Ltd (SS:688256) fell as much as 2% before reversing course.
Other chip stocks were a mixed batch, with Hua Hong Semiconductor Ltd (HK:1347) down nearly 6% in Hong Kong trade, while NAURA Technology Group Co Ltd (SZ:002371) added 2.6%. The Hang Seng chipmakers index fell about 0.1%.
Chinese chip stocks were spooked by a Friday report that the Trump administration was internally discussing whether to allow NVIDIA Corporation (NASDAQ:NVDA) to sell its H200 chip in China, amid a push to improve trade ties with Beijing.
The H200 chip was unveiled two years ago, and is estimated to be twice as powerful as Nvidia’s H20 chip– the most advanced AI processor that the company can legally sell in China.
Sales of the H20 were briefly blocked this year before Washington loosened export restrictions as part of a trade deal with Beijing.
Trump’s recent considerations for allowing the H200 are also in a bid to further improve trade ties with China, as the U.S. races to secure critical rare earth supplies.
Nvidia being allowed to sell a more advanced AI chip in China could offer increased competition for local chipmakers, who are attempting to develop their own rival AI chips. Sales of the H200 could also shift demand away from local chipmakers and undermine Beijing’s efforts for complete self-reliance in AI.
Still, last week’s report said a decision on Nvidia’s sales was not imminent. Discussions in the White House over the matter also come as U.S. lawmakers seek to further block chip sales to China.
The bipartisan GAIN AI act seeks to establish regulation where U.S. chipmakers will have to prioritize local companies before receiving any approval to sell chips to China.
Beijing has largely balked at U.S. chip export restrictions, and passed recent legislation aimed at complete self-reliance in the country’s chipmaking and AI development efforts.