Background on the Investigation
China has officially announced an investigation into NVIDIA, scrutinizing the company’s potential violations of antitrust laws. This move is seen as a possible retaliation against the recent U.S. embargo on semiconductor exports, as reported by Reuters. The State Administration for Market Regulatory Affairs (SAMR) has not disclosed specific details regarding these alleged violations, but it suggests that they may be tied to NVIDIA’s 2020 acquisition of Mellanox Technologies.
NVIDIA’s Market Presence in China
Once a dominant player in China’s AI market, NVIDIA accounted for over 90% of the market share. However, its performance has significantly decreased, generating only 17% of its revenue from the region, a drop from 26% two years prior. This decline directly correlates with U.S. export controls that have compelled NVIDIA to develop China-specific chip versions to remain compliant with international regulations.
Historical Context and Future Implications
The investigation parallels China’s 2013 antitrust probe against Qualcomm’s local subsidiary, which resulted in a monumental $975 million fine for overpricing and abusing market position in wireless communication standards. With the U.S. further tightening export restrictions by adding 140 Chinese semiconductor companies, and China’s subsequent ban on key minerals, the landscape of international semiconductor relations is shifting. As industry associations in China urge domestic companies to steer clear of U.S.-made chips, this investigation could signal a more profound shift in the technology sector.
