The agreement secures necessary export licenses and comes amid easing trade tensions between the US and China, signaling a potential thaw in technology restrictions.
Nvidia and AMD Agree to 15% Revenue Share from China Sales to the US
Nvidia and AMD Agree to 15% Revenue Share from China Sales to the US
In a strategic move, semiconductor giants Nvidia and AMD have committed to channeling 15% of their revenues from China sales to the US government, aligning with export regulations.
In a significant agreement, semiconductor leaders Nvidia and AMD have consented to remit 15% of their sales revenue derived from the Chinese market to the US government, as confirmed by sources familiar with the situation. This step is crucial for obtaining export licenses needed for operating within the expansive Chinese economy.
Nvidia commented on the arrangement saying, "We follow rules the US government sets for our participation in worldwide markets." The company noted that despite halting shipments of its H20 chips to China for several months, it anticipates the new export control rules will facilitate competitive operations both in China and globally. Meanwhile, AMD has not yet commented on the agreement.
Under the new terms, Nvidia will direct 15% of its earnings from H20 chip sales in China to the US government, while AMD will contribute the same percentage from sales of its MI308 chips, as first reported by the Financial Times.
Earlier this year, Washington implemented a ban on Nvidia's H20 chips to China due to security concerns, although recent announcements indicate that this restriction is set to be lifted. The H20 chip was specifically developed for the Chinese market after the Biden administration imposed stringent export controls earlier last year.
Nvidia's CEO Jensen Huang, seeking to revive sales, has engaged in extensive lobbying efforts, reportedly meeting with US President Donald Trump last week. This development coincides with a gradual easing of trade tensions as Beijing has relaxed its export controls on rare earth elements, while the US has lifted certain restrictions impacting Chinese chip design software firms.
The latest agreement follows a truce established in May between the two largest economies, intended to pause their ongoing tariff disputes for 90 days—a peace that has seen ongoing dialogue, although an extension has yet to be confirmed as the August 12 deadline approaches.
