A Reuters article from 15 days ago confirmed rumors that the Chinese military and specialized research institutions have been purchasing advanced semiconductors whose export to China is expressly prohibited by the US government. For the US and its allies, it is practically impossible to ensure that these advanced semiconductors are controlled under the prohi
China's Purchase of Advanced Semiconductors: A Workaround to US Sanctions
A Reuters article from 15 days ago confirmed rumors that the Chinese military and specialized research institutions have been purchasing advanced semiconductors whose export to China is expressly prohibited by the US government. For the US and its allies, it is practically impossible to ensure that these advanced semiconductors are controlled under the prohibitions, as they are already arriving. However, the data we have suggests that they are landing with difficulty in quantities that presumably China needs to sustain the development of scientific research in the field of artificial intelligence (AI) and to guarantee innovation in the military sector. The US sanctions are effective in controlling the export of these goods and their distribution, but the Chinese giants of the Asian country can resort to parallel importation channels to obtain them. Singapore is one of the countries where NVIDIA has multiplied the number of products it has delivered to its clients in the last quarter of 2023 compared to 2022. The increase in sales is difficult to justify under the current situation, but, as we have seen, Singaporean companies are selling chips for AI applications that NVIDIA buys in China. Singapore is one of the countries exempted from US sanctions, differentiating it from South Korea, Japan, and Taiwan. However, the organization led by Gina Raimondo has yet to take action against difficult Singaporean companies. Jensen Huang, NVIDIA's CEO, has pledged to respect US trading rules and negotiate minimally with the US Administration regarding the products that can be sold in China, which cannot be delivered to Chinese clients. Presumably, the US Department of Commerce will test whether NVIDIA and other companies can sell their products to countries that facilitate the entry of prohibited chips into China, as Singapore does, for a long time.