Nvidia is facing a Chinese antitrust investigation, a move seen as retaliation against the US – National
China said on Monday it had launched an investigation into Nvidia over alleged violations of the country's anti-trust law, a move widely seen as retaliation against Washington's recent crackdown on China's chip sector.
A statement from the State Administration for Market Regulation announcing the investigation did not say how the US company, known for artificial intelligence and gaming chips, may have violated China's anti-monopoly laws.
It said the US chipmaker is also accused of breaching commitments it made when it acquired Israeli chipmaker Mellanox Technologies under terms outlined in the regulator's conditional approval of that 2020 contract.
Shares of Nvidia closed 2.5% lower on Monday. An Nvidia spokesperson said the company has worked hard to “provide the best products we can in every region and honor our commitments everywhere we do business.” We are happy to answer any questions regulators may have about our business.”
The investigation comes after the US last week launched its third crackdown in three years on China's semiconductor industry, which saw Washington ban exports from 140 companies, including chip makers.
“It is unlikely that (the investigation) will have a major impact on the company, especially in the short term, because many of Nvidia's chips have been banned from being sold in China,” said Bob O'Donnell, senior analyst at TECHnalysis. Research.
In a sign that China intends to firmly fight the latest move, shortly after Washington's announcement, Beijing banned the export of the United States of important minerals gallium, germanium and antimony.
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On the same day, four of the country's top industry associations issued a rare and formal response saying that Chinese companies should avoid buying American chips as they are “no longer safe” and buy locally.
Nvidia has been one of the many companies caught up in the US-China dispute. A previous round of US-imposed export bans stopped Nvidia from selling its most advanced AI chips to China, prompting it to come up with new China-specific versions that complied with US export controls.
“It is clear that the Chinese government is trying to respond to the recent restrictions from the US, but their ability to influence the US semiconductor industry continues to decline over time,” O'Donnell said.
Nvidia dominated China's AI chip market with a share of more than 90% before these trends. However, it faces increasing competition from domestic rivals, chief among them Huawei. China accounted for about 17% of Nvidia's revenue in the year to the end of January, up from 26% two years earlier.
In 2020, the company received significant approval from China for its acquisition of Mellanox Technologies, despite concerns that Beijing could block the deal due to US-China trade tensions.
Beijing's approval imposed several conditions on Nvidia and China's joint venture operations, including prohibitions on forced product bundling, unfair trade terms, purchasing restrictions and discriminatory treatment of customers who buy products separately.
The last time China launched an anti-terror investigation into a high-profile foreign technology company was in 2013 when it investigated a local subsidiary of Qualcomm for overcharging and abusing its market position in wireless standards.
Qualcomm later agreed to pay a $975 million fine, which at the time was China's largest ever imposed on a company.
