US semiconductor giants Nvidia and AMD are set to hand over 15% of their China chip sales to the United States government under a new policy aimed at tightening control over strategic technology revenue. The measure, confirmed by officials on Wednesday, is part of a broader effort to reduce reliance on Chinese markets and to redirect profits towards domestic innovation and national security programs.
The decision comes amid ongoing US-China tensions over technology, trade, and security. Washington has already imposed export restrictions on advanced chips and artificial intelligence hardware destined for China, citing concerns that such technologies could be used for military purposes. This new sales levy adds a significant financial burden on companies operating in the lucrative Chinese market.
For Nvidia, China has been a critical growth driver, especially with its AI-optimized graphics processing units (GPUs) being in high demand for both research and commercial applications. AMD, similarly, has leveraged its server processors and high-performance computing products to secure a strong foothold in China’s data center and gaming markets. However, the 15% payment will inevitably impact profit margins and could influence how both companies approach their China strategy.
Industry analysts suggest that the move could accelerate the decoupling of US and Chinese semiconductor supply chains. Some believe that Nvidia and AMD may reduce their exposure to China over time, shifting focus to other high-growth regions such as India, Southeast Asia, and the Middle East. Others warn that the new policy could invite retaliatory measures from Beijing, potentially making it more difficult for US companies to operate in China altogether.
The policy’s supporters in Washington argue that the levy ensures that revenues generated from sensitive technology are reinvested into the US economy, particularly in research, domestic chip production, and semiconductor workforce development. Critics, however, worry that the measure could weaken the global competitiveness of American firms, especially if foreign rivals face fewer restrictions in the Chinese market.
Nvidia and AMD have not yet issued detailed public statements on the matter, though both companies are expected to comply with the policy to avoid sanctions. Investors are closely monitoring the situation, as share prices of both companies dipped slightly following the announcement.
With the semiconductor industry already navigating supply chain disruptions, fluctuating demand, and geopolitical uncertainty, this latest move marks another shift in the complex and high-stakes world of global technology competition. Whether it strengthens US technological leadership or sparks further trade tensions remains to be seen.
