Will the US Chip Restrictions on China Backfire? Experts: Chinese Producers Like Huawei Will Benefit!

As the US continues to escalate its unreasonable suppression and "blockade" of China's chip industry, overseas semiconductor analysts have finally realized that something is wrong. They warn that these policies may backfire, delivering a "big gift" to domestic Chinese chip producers like Huawei.

Last week, the US Department of Commerce suddenly announced that simplified versions of chips specifically designed according to US policies, such as NVIDIA's H20 and AMD's MI308, must also obtain new licenses to be exported to China, and this policy is indefinitely effective. NVIDIA is expected to incur an additional $5.5 billion in costs next quarter due to this, while AMD will likely face an additional $800 million in costs.

Chinese Producers Benefit

Analysts point out that, upon examining the domestic situation in China, it seems that Trump's "calculations" are falling flat.

Jack Gold, chief analyst at consulting firm J. Gold Associates, stated bluntly: "In fact, the US is handing China a huge victory because China is pushing hard to develop its own chips."

"Once Chinese chips become competitive, they will be sold globally, and people will buy them. Once that happens, it will be very difficult for US chip producers to regain lost market share," he warned.

Brady Wang, deputy director of market research firm Counterpoint Research, said: "Several local Chinese companies are producing chips that compete with NVIDIA, including tech giants Huawei and Cambricon."

Wang added that these local Chinese competitors now have greater motivation and opportunities to develop and improve their chip solutions. He also expects that the demand for their GPUs will increase.

Doug O'Laughlin, an industry analyst at independent semiconductor research firm SemiAnalysis, said: "Due to restrictions on NVIDIA's H20 and other advanced GPUs, domestic substitutes like Huawei's Ascend series are gaining traction." Given Huawei's progress in GPUs and reports of workarounds for export controls, many experts doubt whether the US export controls targeting NVIDIA will achieve their intended goals.

Paul Triolo, partner and senior vice president of China at global consulting firm DGA group, said: "The US controls on GPUs and semiconductor manufacturing equipment mainly harm US companies, including NVIDIA, while having little impact on Chinese companies' ability to develop cutting-edge AI models."

He added that, on the contrary, export controls are encouraging the Chinese semiconductor industry to become more innovative.

Bright Prospects

It was also reported that in the first three months of this year, Chinese companies ordered at least $16 billion worth of H20 server chips. Counterpoint's Wang said it is unclear how long the existing inventory of different companies can last, but it provides more time for Chinese chip manufacturers to scale up GPU production.

"In the short term, I think the impact of the controls is limited... In the medium and long term, it will depend on the progress of local GPU development," he added.

It is reported that Huawei's latest Ascend 920 AI chip is expected to enter mass production in H2 2025, with experts saying its performance is close to that of the H20 chip.

A recent report by SemiAnalysis noted that although Huawei "is still one generation behind in chip manufacturing processes," the company is "making waves" in the semiconductor industry.

"While there are still gaps in software maturity and overall ecosystem completeness, hardware performance is rapidly closing," he added.