China Shuns Intel And AMD

Todd Moses
April 14, 2024

China's shift from U.S. Intel and AMD chips has intensified in response to American trade restrictions designed to deny the country the required A.I. hardware and manufacturing equipment to achieve self-sufficiency.

Inputs that matter: As of 2023, the Chinese market accounted for 27% of Intel's revenue and 15% of AMD's.

  • Late last year, Beijing issued a list of 18 CPUs approved by its citizens without mentioning Intel and AMD.

The opportunity: Semiconductors are becoming strategic decisions for companies and a matter of national security for countries.

  • Tensions between China and the U.S. are currently boiling over semiconductors.
  • TechCrunch says Meta spends more on Hardware than A.I. talent.
  • A.I. and Cryptocurrency will double data center energy consumption by 2026.

Zoom in: China's response comes four years after the FCC barred Chinese chip maker Huawei and ZTE-made telecommunications equipment from U.S. networks.

  • The delay in the response signifies that China is catching up with the U.S. in semiconductor technology, often using U.S. designs obtained from previous manufacturing deals.
  • Chinese chip maker Loongson has been manufacturing MIPS CPUs using designs from U.S. chipmaker MIPS Technologies.
  • Tom's Hardware reports, "Loongson apparently violates U.S. sanctions on China."

Between the lines: The Biden-Harris Administration recently announced an $8.5 billion deal to help Intel become the U.S.'s leading chip maker.

  • Intel plans to use taxpayer funds to expand manufacturing in Arizona, New Mexico, Ohio, and Oregon, creating 30,000 new jobs.
  • "The CHIPS for America program will bring semiconductor manufacturing back to the U.S. and create a vital R&D ecosystem to keep it here," said Under Secretary of Commerce for Standards and Technology Laurie Locascio.

Follow the money: Intel is using taxpayer funding to grow, AMD is transitioning as it works to catch its rivals, and Nvidia is eating the world.

  • Gary Marcus, an A.I. expert who spoke at the U.S. Senate A.I. Oversight Subcommittee, reports Sequoia discovered that the A.I. industry spent $50 billion on Nvidia chips to train A.I. models last year.
  • Nvidia's revenue increased 224% in 2023 and is projected to grow double-digits in 2024.
  • The Motley Fool says, "Hans Mosesmann of Rosenblatt Securities recently placed a $1,400 price target on Nvidia stock -- implying nearly 60% upside."

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Read More

  1. https://www.theregister.com/2024/04/13/china_telco_chips/
  2. https://www.tomshardware.com/pc-components/cpus/chinese-chipmaker-loongson-wins-case-over-rights-to-mips-architecture-companys-new-cpu-architecture-heavily-resembles-existing-mips
  3. https://banananomics.co/us_backs_intel_while_nvidia_moves_forward
  4. https://banananomics.co/the_ai_boom_bust_cycle
  5. https://banananomics.co/meta_microsoft_and_nvidia
  6. https://finance.yahoo.com/news/amd-stock-buy-104500805.html