Zebeth Media Solutions

Huawei

Nvidia touts a slower chip for China to avoid US ban • ZebethMedia

Two months after the U.S. choke off China’s access to two of Nvidia’s high-end microchips, the American semiconductor design giant unveiled a substitute with a reduced processing speed for its second-largest market. The Nvidia A800 graphic processing unit is “another alternative product to the Nvidia A100 GPU for customers in China,” a spokesperson for Nvidia said in a statement to ZebethMedia. “The A800 meets the U.S. government’s clear test for reduced export control and cannot be programmed to exceed it.” The new chip was first reported by Reuters on Monday. The A100 processor is known for powering supercomputers, artificial intelligence, and high-performing data centers for industries ranging from biotech and finance to manufacturing. Alibaba’s cloud computing business has been one of its customers. A100, along with Nvidia’s enterprise AI chip H100, were placed under a U.S. export control list to “address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia.” Nvidia previously reported that the U.S. ban could affect as much as $400 million in potential sales to China in the third quarter, so the new chip seems to be an attempt to remedy the financial loss. The A800 GPU went into production in Q3, according to Nvidia’s spokesperson. Indeed, chip distributors in China, such as Omnisky, are already marketing A800 in their product catalogs. The chip looks to be designed to circumvent U.S. export rules while still carrying out other core computing capabilities. Most of the key specs of A100 and A800 are identical except for their interconnect speeds: A800 runs at 400 gigabytes per second while A100 functions at 600 gigabytes per second, which is the performance threshold set by the U.S. ban. According to an analysis from the Center for Strategic and International Studies, a bipartisan think tank, “By only targeting chips with very high interconnect speeds, the White House is attempting to limit the controls to chips that are designed to be networked together in the data centers or supercomputing facilities that train and run large AI models.” Nvidia isn’t the only one slowing down its chips in order to evade U.S. sanctions. Alibaba and Chinese chip design startup Biren, which have been pouring resources into making rivals of Nvidia processors, are modifying the performance of their latest semiconductors, according to the Financial Times. That’s because Alibaba and Biren, like other fabless semiconductor firms, contract Taiwan’s TSMC to make their products. And because U.S. export controls cover chip sales by companies using American technologies, sales from TSMC fabs to China could be curtailed.

China’s smartphone shipments slumped 23% in Jan-Aug • ZebethMedia

Smartphone shipment is often seen as the bellwether of China’s consumer spending, and right now, the picture isn’t very rosy. The world’s largest market for smartphones shipped 175.1 million handsets between January and August, marking a sharp 22.9% decline year-over-year, according to research from a state-backed institution. In August alone, shipments dropped 21.9% year-over-year. The global smartphone market as a whole is experiencing a slowdown, logging a 9% decline in the second quarter due to a mix of challenges including a COVID-struck economy, inflation, and deceleration following years of frantic growth. China’s growing consumer appetite obviously played a big part in driving the boom, and now that the world’s second-largest economy is hitting a speed bump, the smartphone industry is inevitably taking a hit. The era of economic miracles is coming to a close in China. On Monday, official data reported a 3.9% GDP growth rate from July to September, which beat forecasts but was way below the double digits that propelled the country’s economy forward for three decades. China is not only the world’s largest market for hanset users but is also its largest phone producer, with home-grown brands like Huawei, Oppo, Vivo, and Xiaomi rising over the years to rival Apple and Samsung. These domestic phone markers began seeking overseas expansion well before their home market start cooling down. And they’ve successfully carved out their international market share and have in recent years consistently shared the top five spots alongside Apple and Samsung. The smartphone industry is notoriously cut-throat with modest margins, so it wasn’t unsurprising when Xiaomi and Oppo, which are long known for selling budget phones, started offering higher-end models in recent years. Huawei established a strong presence in the premium handset space before the U.S. cut off its supply of critical chipsets and key Android services. Having seen how overdependence on advanced U.S. technologies and geopolitical tensions has wrecked Huawei’s revenues, Oppo and the likes are rushing to work on their own smartphone processors. The need for Chinese firms to have their own high-end chips is getting dire as the Biden administration hit China with possibly the strictest export controls earlier this month. Analysts are still parsing the impact of the policy, but initial observation shows that the new rules will not only restrict Chinese companies’ access to high-end U.S. chips but will also bar their access to chip-making equipment, which will hobble the country’s ability to develop such advanced technologies.

US charges two alleged Chinese spies over plot to obstruct Huawei prosecution • ZebethMedia

The U.S. Department of Justice (DOJ) has unsealed charges against two alleged DPRC spies who are accused of attempting to obstruct a federal prosecution against Chinese telecommunications giant Huawei. In a criminal complaint dated October 20 and made public on Monday, the U.S. claims that two Chinese intelligence officers, Guochun He (known as “Dong He”) and Zheng Wang (known as “Zen Wang”), attempted to bribe a U.S. law-enforcement official to obtain what they believed was inside information about the U.S. criminal case against a “global telecommunications company based in China.” The complaint doesn’t name the company, but the details match up with the known prosecution of the company. Huawei did not respond to a request for comment. The complaint alleges that He and Wang “attempted to direct a person they believed they recruited as an asset” inside a U.S. government law enforcement agency “to obtain confidential information regarding potential new charges to be brought against [Huawei] for the purpose of obstructing justice.” The government alleges He and Wang first cultivated their relationship with the law enforcement employee, who is not named, in February 2017, but that person “subsequently began working as a double agent for the U.S. government.” The men are accused of attempting to extract confidential information about witnesses and trial evidence in the Huawei case and paid the double agent, referred to as “GE-1”, $61,000 in bitcoin, cash and jewelery for what they believed was insider information about the Justice Department’s pending prosecution of the China-based company. At one point in October 2021, the indictment alleges, the undercover agent passed a single-page document to one of the Chinese intelligence officers, classified as “SECRET”, that detailed U.S. plans to arrest two principals from Huawei living in China. They paid the undercover agent $41,000 just for that single page. “Far more than an effort to collect information or intelligence, the actions of the PRC intelligence officers charged in this case must be called out for what they are: an extraordinary intervention by agents of a foreign government to interfere with the integrity of the U.S. criminal justice system, compromise a U.S. government employee and obstruct the enforcement of U.S. law to benefit a PRC-based commercial enterprise,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Department of Justice will not abide nation-state actors meddling in U.S. criminal process and investigations, and will not tolerate foreign interference with the fair administration of justice.” If convicted, He and Wang face up to 60 years and 20 years in prison, respectively. The case was one of three unsealed on Monday relating to alleged Chinese interference in the U.S. justice system. One in New Jersey charges three Chinese intelligence agents with conspiring to act in the U.S. as illegal agents on behalf of a foreign government, while another in the Eastern District of New York accuses several people working on behalf of the Chinese government of “engaging in a multi-year campaign of threats and harassment to force a U.S. resident to return to China,” Attorney General Merrick Garland said Monday.

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