Inspur Group is the world’s third-largest provider of the servers used in data centers that power cloud computing.
Nvidia Corp, Advanced Micro Devices Inc and other tech firms are scrambling to assess whether to halt sales to units of China’s Inspur Group Ltd after it was blacklisted from US exports last week.
United States last week added Inspur to its trade blacklist for allegedly purchasing US-sourced items in support of China’s military modernization efforts. The listing means companies cannot sell items to Inspur, such as semiconductors made with US tools, unless they apply for and obtain licences, which are likely to be denied.
A spokesman for the US Commerce Department told Reuters news agency on Tuesday that it “is reviewing the Inspur Group Co Ltd entity list entry and will update it as appropriate,” referring to the official name of the list. export black.
Executives from AMD and Nvidia were questioned about dealings with Inspur Group Co Ltd at an investor conference on Monday. AMD said it was seeking clarification on the rules.
While not a household name, the China-listed Inspur subsidiary had nearly $10 billion in sales in 2021 and the Inspur Group is the world’s third-largest supplier of the servers used in data centers that power computing. in the cloud, according to figures from market research firm IDC for the third quarter of 2022, the most recent available.
But chip industry experts and their advisers said the companies are trying to assess whether to stop supplying to Inspur subsidiaries, including Inspur Electronics Information Industry Co, which is not automatically subject to the restrictions.
US regulators could view unlicensed shipments to that subsidiary as a violation of last week’s listing if there is a risk of products going from the unlisted subsidiary to the listed parent. Inspur Electronics Information Industry Co has the same corporate address as the blacklisted parent company.
“Shipments to related entities constitute a ‘red flag’ due to the risk of diversion,” the Commerce Department spokesman said in a statement.
Inspur did not respond to a request for comment. Last week, an official at the Chinese embassy in Washington, DC, told Reuters that China is “strongly opposed” to placing Inspur and 27 other companies on the trade blacklist.
A Chinese Foreign Ministry spokesman last week also said the US was “once again cracking down on Chinese companies under false pretenses through unfair means.”
More restrictive Inspur list
Dan Fisher-Owens, an export law lawyer at Berliner Corcoran & Rowe who works with chip firms, said many of his clients have stopped shipments to Inspur subsidiaries to assess the situation.
At an investor conference in San Francisco, California, on Monday, Nvidia’s chief financial officer, Colette Kress, said the company will “monitor export controls very closely,” but would not comment on whether Nvidia has stopped shipping to the United States. Inspur subsidiaries.
“We will probably work with other partners,” Kress said. An Nvidia spokesperson declined to comment beyond his comments.
An AMD spokesperson did not respond to a request for additional comment on AMD CTO Mark Papermaster’s comments made at the same conference call.
Inspur’s inclusion is even more restrictive than many other companies on the US Department of Commerce’s “entity list” and may be comparable to the restrictions placed on the blacklisted Chinese telecommunications company, Huawei Technologies, said a person familiar with the matter.
As with Huawei, the listing restricts the shipment of products to Inspur even if they are manufactured in a foreign country but with American technology. Those products also cannot go to Inspur subsidiaries if the blacklisted corporate parent is considered part of the transaction under a broad definition of the term, the person said.
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