Experts Q&A.
Since the US tech voltages are still mounted, the semiconductor industry has become a focus in a geopolitical conflict with high operations.
The most recent round of US export restrictions even used the NVIDIA H20 chip as compliant problem-by-problem for Chinese buyers. These developments raise urgent questions about the future of global chip design, innovation and market access.
Valeria Bertacco informs her findings in order to understand this quickly developing dynamic. As a leading expert in computer architecture and semiconductor design, it is Mary Lou Dorf Collegiate Professor of Computer Science and Engineering at the University of Michigan and leads the applications that runs architectural research center, supported by a consortium of the large semiconductor companies.
She examines how the US policy turns the global semiconductor landscape – and what this means for innovation, energy efficiency and the future of companies such as Nvidia:
NVIDIA specially created the H20 chip to adhere to the US restrictions. According to reports, this product is no longer accessible to Chinese companies. What does the new ban say about the developing nature of US technology policy towards China?
The attitude of the US government towards the People's Republic of China was increasingly a challenge for the semiconductor industry for the global industry-as evidence. Many technology companies work continuously to navigate the changing political space in order to comply with the US regulations and at the same time minimize the losses of the customer base on the global market.
Jensen Huang, CEO of Nvidia, said in Beijing that Nvidia in Beijing “absolutely serves the Chinese market”. How realistic is this in view of the ongoing house examinations and increasingly closer export controls? What forms could China even accept at this point? Another H20 variant?
So far, the hardware, which is limited in some international markets, is aimed only on the high-end chips, which represent a small fraction of the AI hardware market. Mid and low-end hardware are still available to these markets and EDGE-AI hardware, which are all important markets that are well served by US companies and startups.
One of the critical needs in the AI hardware area is calculation efficiency and energy availability. Current trends suggest that the energy that was issued in AI calculations by the end of the decade could achieve 21% of global energy. The restriction of a large part of the AI community to hardware with a lower end was a catalyst in combating the efficiency of the AI. Recently we saw a clear demonstration of this trend in the Deepseek LLM model, which uses significantly fewer resources than previous large AI models.
Can US chipmakers like Nvidia and AMD keep their innovation advantage if you permanently lose access to the Chinese market? How can reduced sales, scaling or different customer requirements affect your long-term research and development?
To the extent that sales in these FORGE companies in these markets technology companies funds, there is certainly a risk that these companies would have to restrict their internal innovation and research financing. The financing of the US government could help to alleviate this potential loss of opportunities in relation to innovation through research programs for AI technology.
Another important area of concern is access that student fasting of each country on the planet-I universities with subsequent paths to the US technology positions. For decades, the US technology leadership has attracted the best talent worldwide, trained it in our academic institutions and included it in our tech industry. If this river were coming to an end due to political changes, we would certainly see great effects on the technological innovation guided by the US, especially in the semiconductor and software industry.
Is there a risk that excessively aggressive restrictions NVIDIA or similar companies could lead to moving parts of their business or innovation base abroad – possibly to less limited markets?
It could. I don't think this is a consideration today, but we do not know how political restrictions can develop. If such changes took place, I assume that they would be slow and incremental. And even to undo it any slower.
How will this affect leading Chinese technology companies such as Alibaba, Tencent, Bytedance and Deepseek? Could a persistent chip deficiency slow down your innovation?
It will probably be in the short term. However, the defect can make the innovators examine alternative ways to new solutions, of which one may not consider whether high-end AI chips were available everywhere. For example, Deepseek showed that high-quality LLM training with a size can be achieved less arithmetic than has been traditionally considered. Her innovations may not have been followed if the impending threat from a limited access to high-end AI chips had not been there.
What does this mean for China's local alternatives such as chips from Huawei or Cambricon? Do you think you can scale quickly enough to satisfy domestic AI demand?
The government of the VR China has the means to invest in the expansion of its semiconductor industry and support its own innovation advances to try to become a leader in the global semiconductor area. The US political restrictions can accelerate their efforts in this direction by tightening unfulfilled market needs of unfulfilled PRC.
How could this shift in the global AI supply chain new to TSMC in Phoenix and the construction of supercomputers in Texas in the domestic TSMC in Phoenix and build supercomputers in Texas? And how could it affect Taiwan's strategic role in global chip production?
The expansion of the functions of semiconductor production in the USA thanks to TSMC and other manufacturers, including Intel, Micron, Samsung, Global Giefe, etc., is a very positive trend that hardens the USA against future weaknesses in the supply chain. These new developments are the result of the Strategic Chip Act, which has been developed since 2022. I do not believe that these trends will reduce the role of Hsinchu and Taiwan in the global semiconductor area, since the demand for chip production still exceeds the offer.