China is tightening controls on chip imports at major ports, a report claims. This move will reportedly discourage the use of US products, specifically Nvidia’s AI processors, in the country. In recent weeks, Chinese customs officers have been mobilised to conduct stringent checks on semiconductor shipments nationwide, a report by The Financial Times, citing sources familiar with the matter, claimed. The initial goal of these inspections was to ensure that local companies stop ordering Nvidia’s China-specific chips, namely the H20 and RTX Pro 6000D AI chipsets, following guidance from Chinese regulators. These Nvidia chips were designed to comply with US export controls and maintain the chipmaker’s market share in China. Now, the inspections have expanded to include all advanced semiconductor products to target the smuggling of high-end chips that violate US export curbs, the report noted. This crackdown highlights Beijing’s focus on weaning its technology sector off American technology and bolstering domestic chipmakers to advance in the AI race.
China has asked customs officials to investigate companies with past declarations
In addition to the tightened border checks, customs officials have also been investigating past declarations by companies regarding the import of advanced semiconductor products. This increased enforcement follows reports that a significant number of Nvidia’s top AI chips were smuggled and sold in China over the three months from May. Previously, Chinese customs had generally allowed chip imports as long as appropriate duties were paid. Beijing aims to redirect resources toward domestic chipmakers to help them improve product performance and manufacturing capacity.
US quantitative trading firm Tower Research faced investigation for alleged hardware smuggling, including advanced chips, the FT reported last week. The probe forms part of the new wave of import controls.The Cyberspace Administration of China (CAC), the internet watchdog, instructed tech companies, including ByteDance and Alibaba, in mid-September to cancel orders and halt testing of all Nvidia products. The border controls have been implemented as a coordinated effort with the CAC.The guidance came two months after Nvidia announced the Trump administration had lifted an earlier US export ban on H20. Nvidia also introduced the RTX Pro 6000D, another modified AI chip for China.The actions follow Beijing’s assessment that domestic chips now match the performance standards of Nvidia’s China-specific processors.China plans to triple production of advanced semiconductors next year to meet demand previously filled by Nvidia, the FT reported last month.Nvidia no longer includes China in its revenue projections. However, it recorded $4.6 billion in the first quarter of this fiscal year from H20 sales to China, its fourth-largest market, before the US temporarily restricted sales.
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