China Says "High Fence" Won't Do Any Good to US after Nvidia Underlines Huawei as Top Competitor

BEIJING, February 27 (TMTPost)-- China warned the Biden administration that any technology curbs on the world’s No.2 economy will only run counter to U.S. desire as American semiconductor giant Nvidia is facing more challenges from Chinese peers, led by Huawei Technologies Ltd.

Credit：Visual China

“Small yard and high fence” will not stop China’s innovation-driven development, nor will it do any good to US companies or the entire semiconductor industry, Mao Ning, the spokesperson of China’s Foreign Ministry, commented on report about Nvidia’ inclusion of Huawei in its current competitors at a regular press on Tuesday. Mao said open cooperation is the core driving force for the growth of the semiconductor industry, and to fragment the Chinese market, one of the major semiconductor markets in the world, destabilize global industrial and supply chains, and stymie efficiency and innovation serves no one’s interests. Mao urged the United States to follow the principles of market economy and fair competition, and support companies around the world in advancing science and technology through healthy competition.

Mao’s remark came after Nvidia first underlined Huawi as a top competitor in artificial intelligence (AI), chips and various areas in a regulatory filling last Wednesday. Nvidia said Huawei competes in supplying chips designed for AI such as graphics processing units (GPUs), central processing units (CPUs) and networking chips. The Santa Clara, California-based company also identified Huawei as a cloud service company designing its own hardware and software to improve AI computing.

Earlier this month, Chinese Foreign Minister Wang Yi compared U.S. attempts to curb China to “small yard and high fence”. during his in-person meeting with U.S. Secretary of State Antony Blinken on the sidelines of the 60th Munich Security Conference, Wang stressed either turning "de-risking" into "de-China", building “small yard and high fence”, or engaging in "decoupling from China" will eventually backfire on the United States. Wang renewed Beijing’s call for the U.S. to lift “illegal unilateral” sanctions against Chinese companies and individuals, and also asked to stop harming China’s rights and interests of legitimate development.

Nvidia is the semiconductor designer that dominates the market for AI chips, which empower AI systems including the large language model behind ChatGPT. The U.S. has imposed months ago a new export control on AI offerings to China. The U.S. Department of Commerce introduced a rule entitles “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections”, on October 18. The rule was supposed to come into effect following a 30-day public comment period. But Nvidia disclosed on October 25 that the U.S. government informed the licensing requirements of the rule applicable to products having a “total processing performance” of 4800 or more and designed or marketed for data centers, is effective immediately.

Nvidia has modified some of flagship products including A100 and H100 for exports to China, including an alternative A800 chip, as the U.S. regulators last year banned it from selling its most advanced chips to China. But even A800, the weakened version of Nvida’s cutting-edge A100 processor, is not allowed for export without first obtaining a license according to the new restrictions.

TMTPost learned in December that Nvidia will launch a new set of chips under the name of HGX H20, L20 PCle, L2 PClel for China market, though all of them are weakened version. Compared with H100, the HGX H20 has limitations on bandwidth and computing speed, and its overall computing power is about 80% less than that of H100, namely, the comprehensive computing performance of H20 is equal to 20% of H100.

Nvidia CEO Jensen Huang said in December that has been working very closely with the U.S. government to make sure products for China comply with new rules about export controls. Huang noted Intel, Huawei and the growing number of semiconductor startups are posing serious challenges to Nvidia’s domination, and Nvidia has a lot of competitors in and outside China. But the executive said he is not phased by such competition and believes it’s good for the advancement of the technology.