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China said on Monday it had launched an investigation into Nvidia for alleged violations of the country’s antitrust law, in a move widely seen as retaliation against Washington’s latest restrictions on the Chinese chip sector.
The State Administration for Market Regulation’s statement announcing the investigation did not detail how the American company, known for its artificial intelligence and gaming chips, could have violated China’s antitrust laws.
He said the U.S. chipmaker was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies under the terms outlined in the regulator’s conditional approval of that deal in 2020.
Nvidia shares closed 2.5% lower on Monday. An Nvidia spokesperson said the company worked hard to “deliver the best products we can in every region and deliver on our commitments everywhere we do business. “We will be happy to answer any questions regulators may have about our business.”
The investigation comes after the United States last week launched its third offensive in three years against China’s semiconductor industry, in which Washington limited exports to 140 companies, including chip equipment makers.
“(The investigation) is unlikely to have a big impact on the company, particularly in the near term, because most of Nvidia’s most advanced chips can no longer be sold in China,” said Bob O’Donnell, chief analyst at TECHnalysis. Investigation.
In a sign that China intends to strike back forcefully against the latest measure, shortly after Washington’s announcement, Beijing banned exports to the United States of the critical minerals gallium, germanium and antimony.
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On the same day, four of the country’s main industry associations issued an unusual and coordinated response saying that Chinese companies should be careful about buying American chips because they were “no longer safe” and buy locally.
Nvidia has been one of many companies caught in the friction between the United States and China. An earlier round of export restrictions by the United States prevented Nvidia from selling its most advanced AI chips to China, prompting it to create new China-specific versions that complied with US export controls.
“It is clear that the Chinese government is trying to react against recent US restrictions, but its ability to impact the US semiconductor industry continues to decline over time,” O’Donnell said.
Nvidia dominated China’s AI chip market with a share of more than 90% before these restrictions. However, it faces increasing competition from domestic rivals, most notably Huawei. China accounted for about 17% of Nvidia’s revenue in the year to the end of January, up from 26% two years earlier.
In 2020, the company won key approval from China for its acquisition of Mellanox Technologies, despite concerns that Beijing could block the deal due to trade frictions between the United States and China.
Beijing’s approval set multiple conditions for Nvidia and the merged entity’s operations in China, including prohibitions on forced product bundling, unreasonable trading conditions, purchasing restrictions, and discriminatory treatment of customers who purchase products separately.
The last time China launched an antitrust investigation against a high-profile foreign technology company was in 2013, when it investigated Qualcomm’s local subsidiary for overcharging and abusing its position in the wireless communications standards market.
Qualcomm subsequently agreed to pay a $975 million fine, which at the time was the largest China had ever imposed on a company.
