SAN FRANCISCO — Nvidia CEO Jensen Huang delivered a blistering critique of U.S. export controls on advanced semiconductors to China, declaring that “The $50 billion China market is effectively closed to U.S. industry” and announcing his company is taking a multibillion-dollar writeoff on unsellable inventory.
Market Share Collapse in China
Speaking at the annual Computex technology trade show in Taipei and during recent earnings calls, Huang revealed the dramatic impact of the Biden-era restrictions on his company’s business. “Four years ago, Nvidia had 95 per cent market share in China. Today, it is only 50 per cent,” he told analysts and reporters.
The semiconductor giant, which has become synonymous with the AI boom, has seen its dominant position in the world’s second-largest economy steadily eroded as U.S. export controls have limited American companies’ ability to sell advanced chips to Chinese customers.
“Export Control Was a Failure”
“All in all, the export control was a failure,” Huang declared, arguing that the restrictions have cost American companies billions in lost sales while failing to achieve their intended national security objectives. Huang blasted the “failure” of US restrictions intended to contain China’s technological ascent, calling on the White House to lower barriers to AI chip sales before American firms cede that market to up-and-coming rivals such as Huawei Technologies Co.
The CEO’s comments represent some of the most pointed criticism yet from a major tech executive regarding the Biden administration’s semiconductor strategy, which aimed to prevent China from accessing cutting-edge AI chips that could enhance its military capabilities.
Financial Impact and Inventory Writeoffs
The financial toll on Nvidia has been substantial. During his earnings call remarks, Huang announced that “we are taking a multibillion-dollar writeoff on inventory that cannot be sold or repurposed” due to the export restrictions.
This writeoff reflects the challenge faced by semiconductor companies that have been caught between geopolitical tensions and business realities, with products already manufactured but unable to reach their intended markets.
Broader Industry Implications
Chip experts say that the curbs create more harm than good for the U.S., echoing Huang’s assessment that the controls have backfired. The restrictions, originally designed to maintain American technological superiority, may instead be accelerating China’s development of domestic alternatives while costing U.S. companies market share and revenue.
The semiconductor industry has found itself at the center of U.S.-China tensions, with companies like Nvidia, AMD, and Intel all facing restrictions on their ability to sell their most advanced products to Chinese customers.
Looking Ahead
As the Trump administration takes office with promises to reassess trade and technology policies with China, industry leaders like Huang are advocating for a more nuanced approach that balances national security concerns with economic realities.
The debate over semiconductor export controls highlights the complex challenges facing policymakers as they attempt to manage the relationship between the world’s two largest economies while protecting American technological advantages.
For Nvidia, which has become one of the world’s most valuable companies thanks to surging demand for AI chips, the China market represents not just lost revenue but a strategic challenge as competitors work to fill the void left by American companies.
This story continues to develop as trade and technology policies evolve under the new administration.
