Some Chinese buyers seem to be resorting to desperate measures to get Nvidia's most advanced chips

[Daniel Nenni]

• - Chinese buyers are trying to avoid US chip curbs by smuggling, The Wall Street Journal reported.
• - Underground channels involve travelers bringing them into China in their luggage, per the report.
• - The US banned advanced Nvidia chip imports to China in 2022 and tightened its controls last year.

Some Chinese chip buyers have found a brazen way to dodge curbs on Nvidia GPUs.

The US blocked China from importing advanced Nvidia chips in 2022, so some travelers are smuggling them in their luggage, The Wall Street Journal reported.

The outlet reviewed records, including customs filings, that showed Nvidia chips were being purchased by Chinese buyers in an underground market.

One distributor in Beijing told the Journal he received dozens of chips a month and that "there is always a way" to get them into China.

Another broker said he acquires chips via personal contacts at official distribution channels and system integrators in southeast Asia before acting as an intermediary for buyers and handling the transportation.

One method the broker employed was failing to state the chip model numbers on paperwork, according to customs filings seen by the Journal.

Some Chinese firms even resorted to repurposing Nvidia's gaming chips so they could power AI models, The Financial Times reported earlier this year.
The demand for Nvidia's most advanced chips is so acute because they're regarded as crucial for training AI models.

Reuters reported in April that Chinese universities and research institutes, including the Chinese Academy of Sciences, obtained Nvidia chips through resellers.
Nvidia does not sell directly to China because of the US export ban.

In November, the White House strengthened US sanctions. The Department of Commerce implemented the Advanced Computing Chips Rule, which makes it harder for China to import AI chips from American manufacturers.

Nvidia didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

Read the original article on Business Insider

 

[tonyget]

Long Nvidia stock

 

[KevinK]

Maybe due to Ascend 910B not looking so good. The most details I have seen so far:

Huawei Faces Production Challenges with 20% Yield Rate for AI Chip​

According to a report from ChosunBiz, the chip is being manufactured by China’s leading semiconductor foundry, SMIC, and has been in mass production for over half a year, yet the yield rate remains around 20%. Frequent equipment failures have severely limited production capacity.

SMIC initially projected an annual production of 500,000 units for the Ascend 910B, but due to continuous equipment failures, this goal has not been met. Currently, SMIC is unable to introduce new equipment and has to retrofit low-performance Deep Ultraviolet (DUV) equipment to replace advanced Extreme Ultraviolet (EUV) equipment for etching the 7nm circuits of the AI chips.

Dutch photolithography giant ASML stated that using EUV equipment for 7nm processes requires only nine steps, whereas using DUV equipment requires 34 steps.

Industry sources cited by the same report reveal that SMIC lacks engineers for maintaining and managing chip manufacturing equipment, and global equipment suppliers are hesitant to provide services to China due to U.S. sanctions. SMIC is currently using equipment and parts purchased before the U.S. sanctions to maintain its 7nm production line.

[News] Huawei Faces Production Challenges with 20% Yield Rate for AI Chip | TrendForce News

Previously, Huawei claimed its second-generation AI chip "Ascend 910B" could compete with NVIDIA's A100 and was working to replace NVIDIA, which holds...

www.trendforce.com

 

[Paul2]

• - Chinese buyers are trying to avoid US chip curbs by smuggling, The Wall Street Journal reported.
• - Underground channels involve travelers bringing them into China in their luggage, per the report.
• - The US banned advanced Nvidia chip imports to China in 2022 and tightened its controls last year.

Some Chinese chip buyers have found a brazen way to dodge curbs on Nvidia GPUs.

The US blocked China from importing advanced Nvidia chips in 2022, so some travelers are smuggling them in their luggage, The Wall Street Journal reported.

The outlet reviewed records, including customs filings, that showed Nvidia chips were being purchased by Chinese buyers in an underground market.

One distributor in Beijing told the Journal he received dozens of chips a month and that "there is always a way" to get them into China.

Another broker said he acquires chips via personal contacts at official distribution channels and system integrators in southeast Asia before acting as an intermediary for buyers and handling the transportation.

One method the broker employed was failing to state the chip model numbers on paperwork, according to customs filings seen by the Journal.

Some Chinese firms even resorted to repurposing Nvidia's gaming chips so they could power AI models, The Financial Times reported earlier this year.
The demand for Nvidia's most advanced chips is so acute because they're regarded as crucial for training AI models.

Reuters reported in April that Chinese universities and research institutes, including the Chinese Academy of Sciences, obtained Nvidia chips through resellers.
Nvidia does not sell directly to China because of the US export ban.

In November, the White House strengthened US sanctions. The Department of Commerce implemented the Advanced Computing Chips Rule, which makes it harder for China to import AI chips from American manufacturers.

Nvidia didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

Read the original article on Business Insider

I have very different accounts. All restricted components like high power RF transistors, angular encoders, IR/NV sensors are widely traded, and those are far, far, far more controlled stuff than video cards, all legit buyers of which in the world will fit onto single piece of paper.

As for video cards, all of them still come stamped with "Made in China" and that China is certainly not the Republic Of.

Current trade curbs only affect exports which export, and sale were accounted on paper in China. Nothing about physical movements of goods. It's obviously easy to divert.

I can only think that those guys smuggling individual video cards are small fish, and amateurs who can't do the paperworks.