On the evening of October 17, 2023, Beijing time, the U.S. government announced the "Interim Final Rules", which upgraded the export restriction rules for high-performance computing chips to China. The rules will take effect on November 17. On October 18, NVIDIA submitted an "8-K document" in accordance with the rules of listed companies, explaining its related restrictive policies and impacts. As of press time, AMD and Intel have not yet officially responded.

What are the latest restrictions on high-performance computing chips?

The latest Interim Final Rule published by the U.S. government amends ECCN3A090 and 4A090 and imposes additional license requirements for exports to China and country groups D1, D4, D4, and D5 (including but not limited to Saudi Arabia, the United Arab Emirates, and Vietnam, but excluding Israel).

According to the revised ECCN3A090 and 4A090 new regulations, restrictions on high-performance computing chips:

From the original "a regulated high-performance computing chip that meets the following two conditions at the same time:"

(1) The I/O bandwidth transmission rate of the chip is greater than or equal to 600Gbyte/s;

(2) The sum of the computing power calculated by multiplying the bit length of each operation of the digital processing unit/original computing unit by TOPS is greater than or equal to 4800TOPS. "

Modify to:

(1) ECCN3A090a is aimed at the highest performance chip. The integrated circuit contains one or more processing units that meet any of the following standards: a) the comprehensive computing performance (Total Processing Performance, TPP) reaches 4800, or b) the comprehensive computing performance reaches 1600, and the "Performance Density" (Performance Density, PD) reaches 5.92.

(2) ECCN3A090b is aimed at sub-high-performance chips. The integrated circuit contains one or more processing units that meet any of the following standards: a) The comprehensive computing performance reaches 2400 but lower than 4800, and the performance density reaches 1.6 but lower than 5.92; b) The comprehensive computing performance reaches 1600, and the performance density reaches 3.2 but lower than 5.92.

PD here refers to the TPP indicator divided by the chip area (unit: mm2). The chip area referred to here includes all areas occupied by logic operation chips, and also includes logic chips manufactured using non-planar transistor architecture process nodes.

In addition, the regulations also require the export of specific chips with performance slightly below the limit to be reported to BIS, and BIS will decide whether this export requires a license.

BIS has also introduced an exemption to allow the export of chips used in consumer applications such as laptops, smartphones, and gaming applications. However, licensing notification requirements are still in place for a small number of high-end gaming chips (this should refer to products such as NVIDIA RTX4090). The purpose is to increase shipment visibility (not to completely ban sales) and prevent the abuse of these chips from undermining U.S. national security.

In addition, in order to prevent circumvention of export restrictions in specific countries and regions, such as using third countries to transfer or obtain restricted items, the new rules extend the export license requirements for high-performance computing chips to overseas subsidiaries of Chinese companies, and the scope of restrictions on exports to other countries and regions has also been expanded.

The new regulations amend ECCN3A090 and 4A090 to impose additional licensing requirements on exports to China and the D1, D4 and D5 country groups (including but not limited to Saudi Arabia, the United Arab Emirates and Vietnam, but excluding Israel). It is reported that licensing requirements will be required for the export of advanced chips to 21 countries outside China and Macau, China, because these countries and regions have the risk of transferring chips to China.

According to the new "License Exception Notification Advanced Computing (NAC)" requirements, after receiving notification of exports and re-exports to Macau, China and areas identified as subject to the U.S. arms embargo, the U.S. government will review and determine whether the transaction can be conducted under the license exception within 25 days.

Which chips from NVIDIA, AMD, and Intel will be restricted?

Based on the above standards, Xinzhixun calculated the relevant public data of NVIDIA, AMD, and Intel’s current server-side AI chips and high-performance GPUs and concluded as follows:

NVIDIA: H100, H800, A100, A800, L40, L40S, RTX4090, RTX4090TI will all be limited;

AMD: MI300, MI250X, MI250, MI200, MI210, and RX7900XTX will all be restricted;

Intel: GPUMAXNEXT and Gaudi2 will be limited.

NVIDIA said in its 8-K filing on October 18 that some of its high-performance computing chips exceeded certain performance thresholds (Including but not limited to A100, A800, H100, H800, L40, L40S and RTX4090).

Any system that contains one or more covered related chips (including but not limited to NVIDIA DGX and HGX systems) will be included in the new licensing requirements. Licensing requirements include future NVIDIA chips, boards that meet aggregate processing performance and/or performance density thresholds or fall under the ECCN 3A090 or 4A090 classification systems.

Licensing requirements apply to a party exporting products of category ECCN3A090 or 4A090 to a party headquartered in or with an ultimate parent company headquartered in the D5 group of countries, including China.

NVIDIA said the licensing requirements may impact the company's ability to complete product development in a timely manner, support existing customers of covered products, or provide covered products to customers outside the affected regions, and may require the company to move certain operations to one or more identified countries.

If a customer requires a product covered by the new licensing requirements, the Company may seek a license for the customer, but there can be no assurance that U.S. BIS will grant any exception or license, or that U.S. BIS will act on the request in a timely manner.

As for the impact on performance, NVIDIA said that the company's third quarter of fiscal year 2024 will end on October 29, 2023. The Interim Final Rule will take effect within 30 days from the date of publication. Given the strong global demand for our products, we do not expect the additional restrictions to have a meaningful short-term impact on our financial results.

It is worth mentioning that at the second quarter financial report meeting in August this year, NVIDIA Chief Financial Officer Kelisi once said that the United States will upgrade China’s artificial intelligence regulatory measures. In view of the strong demand for NVIDIA products in the world, the company does not expect that the additional export restrictions will have an immediate material impact on the financial performance of data center GPUs.

However, NVIDIA also emphasized at the time thatOnce the long-term ban on sales of data center GPUs to China is implemented, it will cause the NVIDIA industry to lose the opportunity to compete and lead in one of the world's largest markets.

Currently, NVIDIA's data center demand from China accounts for 20%-25% of this business revenue, setting a record high.

In response to the new ban, NVIDIA spokesman Ken Brown said, "NVIDIA complies with all applicable regulations while working hard to provide thousands of products that support different industries. Considering the global demand for NVIDIA products, the new regulations are not expected to have a meaningful impact on NVIDIA's financial results in the short term."


access:

Jingdong Mall