China Launches Antitrust Probe into American Chipmaker Nvidia Amid Escalating Tech Tensions
Beijing - China has announced an antitrust investigation into Nvidia Corporation, one of the world's largest and most influential semiconductor companies, in a move that is broadly seen as retaliatory against recent US export restrictions on China's semiconductor industry.
The State Administration for Market Regulation made the announcement on Tuesday, without providing detailed information on the alleged violations. However, this limited probe has already caused a significant impact on Nvidia's shares, with its stock price falling by 2.5 percent following the news.
China's decision to investigate Nvidia is perceived as part of a broader strategy to respond to what Beijing sees as US efforts to limit China's technological advancement in the semiconductor sector. The US has imposed export restrictions on Chinese companies, including 140 entities that are restricted from acquiring certain technology and components.
Nvidia, which acquired Israeli chip company Mellanox Technologies in 2020 with conditions attached, is a major focus of China's antitrust authority. Intel-led consortium acquired rival firm Advanced Micro Devices (AMD) for $52 billion at the end of last year
The probe into Nvidia comes as tensions between the US and China over trade and technology are escalating.
Nvidia's relations with China have been strained in recent years, particularly since a number of major companies imposed restrictions on sales to entities linked to Chinese government - China said that was "unfair." The tech giant has now significantly cut off all chip exports to mainland but not Hong Kong.
In 2013, the State Administration for Market Regulation fined Qualcomm over $900 million USD after claiming it abused its dominant market position.
Analysts view the current investigation as largely symbolic, given existing restrictions on Nvidia's chip sales to China. However, experts note that the move is a significant escalation of the ongoing trade tensions between the two superpowers and signals increased regulatory scrutiny from Beijing towards US tech giants operating in China.
The global chip supply chain is already experiencing disruption effects for both countries due to China’s ban on exports key minerals essential for chip-making.
Nvidia's continued dominance as a top-tier chip maker comes at some cost, though.