'Compliance chips' expose folly of 'chip war'

Earlier this month, there were reports that Nvidia was developing three new chips based on modifications to its H100. The HGXH20, L20PCle and L2PCle series computational chips for the Chinese market to meet the "small yard, high fence" export control restrictions introduced by the United States.

In the disclosure of Nivida's financial results on Thursday, the company's Chief Financial Officer Colette Kress confirmed that the company is developing a "compliance chip" for the Chinese market.

Even though the company's sales to China and other restricted countries and regions might drop in the coming quarter as the news release stated, the "compliance chips" are expected to buffer the impact of the restrictions to a large extent.

Kress said during the earnings release that the US government requires licenses for certain products to be exported and requires advance notice when other types of chips are shipped to economies such as China, and that the company is working with customers in those markets to try to obtain government permits and seek "solutions" that won't trigger restrictions.

The US may of course shrink its yard or build the wall higher, but any in the US Congress considering that should note the fact that China is accelerating its development of chip technology and equipment in an effort to catch up with the developed countries that are trying to hold it by the throat with the restrictions.

Nvidia has made a smart choice. Other companies should follow its example.

Then perhaps the US government will give up its illusion that it can bring China's development to a standstill.