It is reported that in exchange for export licenses to China, NVIDIA and Advanced Micro Devices (AMD) have agreed to pay 15% of their specific chip sales revenue in China to the U.S. government. This agreement involves NVIDIA's H20 and AMD's MI308 chips. Analysts estimate that the sales of NVIDIA's H20 alone could reach $23 billion by 2025. This revenue-sharing arrangement for export licenses is unprecedented for U.S. companies.
According to the latest media reports, $NVIDIA (NVDA.US)$and$Advanced Micro Devices (AMD.US)$they have agreed to pay 15% of their Chinese chip sales revenue to the U.S. government as a condition for the Trump administration to approve semiconductor export licenses. This unprecedented arrangement marks a significant shift in U.S. export control policies.
Sources familiar with the matter revealed that the two chip manufacturers received licenses to export to the Chinese market last week, but they must meet this financial condition. U.S. government officials stated that NVIDIA needs to share 15% of its H20 chip sales revenue in China, while AMD must also contribute 15% of its MI308 chip revenue.
According to Bernstein analysts' estimates, based on NVIDIA's previous performance guidance, the company is expected to sell approximately 1.5 million H20 chips in China in 2025, generating about $23 billion in revenue. This implies that NVIDIA may need to pay over $3 billion to the U.S. government.
According to relevant export control experts, no U.S. company has previously agreed to pay a share of its revenue to obtain an export license. However, this arrangement is consistent with the Trump administration's approach, which has been to urge companies to take measures such as domestic investment to avoid tariffs and bring jobs and revenue to the U.S.
AMD did not respond to requests for comment. NVIDIA did not deny the arrangement, stating, 'We follow the rules set by the U.S. government for our participation in the global market.'
On social media, analysts pointed out the significance of this arrangement, saying, 'The trade war has just entered a new era.'
Most people have not realized the true importance of this announcement. It involves 15% of revenue from China, not profit, and applies to both NVIDIA and AMD. This also means that the Trump administration is now negotiating 'trade agreements' on a company-by-company basis. The trade war has just entered a new era.
Last Friday, the U.S. Department of Commerce began issuing export licenses for H20 chips, two days after NVIDIA CEO Jensen Huang met with Trump. Sources revealed that the U.S. government has also started issuing licenses for AMD's chips bound for China.
According to an official statement from China's Ministry of Commerce, the U.S. side has proactively indicated that it will approve the sale of NVIDIA H20 chips to China.
The Ministry of Commerce stated that China legally approves export applications for controlled items that meet the conditions. In early July, the U.S. side lifted the restrictions on China-related exports discussed in the talks. Win-win cooperation between China and the U.S. is the right path, and suppression and containment are not viable. In May, the U.S. issued export control guidelines targeting Huawei's Ascend chips, imposing stricter controls on Chinese chip products under false pretenses and using administrative power to interfere with fair market competition, severely damaging the legitimate rights and interests of Chinese enterprises. China has made its position clear, firmly opposing these actions. We hope that the U.S. will work with China, through equal consultations, to correct these wrong practices, create a favorable environment for mutually beneficial cooperation between the two countries' businesses, and jointly maintain the stability of the global semiconductor supply chain.
According to a previous report by CCTV News, Trump announced that he would impose a 100% tariff on semiconductor and chip imports but would provide exemptions for companies that build factories in the U.S. He said:
We will impose very high tariffs on chips and semiconductor products, but companies like Apple will not be subject to these tariffs if they build factories in the U.S. or have already made a clear commitment to do so.
In other words, we will impose tariffs of approximately 100% on chips and semiconductor products. However, if you are building a factory in the U.S., you will not be subject to these tariffs. Even if you have not yet started mass production, as long as you are in the construction phase, you will not be subject to these tariffs.
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