One might think that after the company you co-founded and currently lead has just demolished consensus estimates for your near-term future, you could do better than whine about how U.S. regulations restricting exports of your most advanced products to China are tying your hands behind your back. But, as William Blake once commented, “You never know what is enough unless you know what is more than enough. … Enough! or Too much!”
In an interview with the Financial Times on Tuesday, Nvidia Corp. (NASDAQ: NVDA) co-founder and CEO Jensen Huang said the Biden administration’s export controls on the most advanced U.S. semiconductors have tied Silicon Valley’s hands because his firm cannot sell into one of the company’s biggest markets.
In fact, Nvidia is doing a booming business selling the restricted versions of its H100 and A100 products into China using H800 and A800 as product names. The chips are selling at around the same price as the company’s unrestricted version and in large quantities.
China comprises about one-third of the U.S. tech industry’s market, Huang told the Financial Times, and replacing it as both a source of components and an end-user market would be impossible. The piece of the $52 billion in the U.S. Chips Act that would go to building new semiconductor manufacturing plants (fabs) in the United States will be wasted:
If the American tech industry requires one-third less capacity [due to the loss of the Chinese market], no one is going to need American fabs, we will be swimming in fabs. If [the Biden administration] is not thoughtful on regulations, they will hurt the tech industry.
There is always another option. In this case, India, which has just passed China as the world’s most populous country. Not only is India’s population larger, it is also younger. The median age in India in 2021 was 27.6 years; in China, the median age was 37.9 years.
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