Daily: Jensen Huang walks the U.S.-China tightrope
4.5 min read.
Highlights
Jensen Huang in Beijing. Jensen downplayed his role in persuading Trump to resume H20 sales to China, as he tries to strike a balance between the U.S. and China. Nonetheless, Jensen and Nvidia executives have been meeting with senior U.S. officials in the months leading up to the reversal. Jensen is enjoying celebrity status on his China trip, saying he would “accelerate the recovery” of its China sales. Nvidia stock jumped ~4.5% off the news.
Trump’s UAE deal stalls. Trump’s deal in May to sell millions of chips, worth billions of dollars, to the UAE has been stalled over national security concerns. The giant deal has yet to even come out of the gate and momentum seems to have quickly cooled as the president has shifted his attention to China and other matters.
ASML drops 11%. ASML stock drops 11% after a mixed earnings report. Tariffs over the last quarter hurt the company a little, and is expected to be worse in the coming months and year. This comes following yesterday’s news of ASML’s challenges this past year.
Thanks for reading.
1. Policy and Geopolitics
1.1
NYT (07/17): Nvidia C.E.O. Treads Carefully in Beijing
Mr. Huang, the chief executive of the Silicon Valley chip giant, used a 95-minute press briefing on Wednesday in Beijing to play down his role in persuading President Trump to allow chip sales to China. He distanced himself, too, from China’s latest export controls, suggesting even the restrictions on a rare earth metal used in chips wouldn’t affect the company.
Mr. Huang has met with senior officials in Washington and Beijing in the past few days, including Mr. Trump, to promote artificial intelligence and his company’s central role in the industry.
Mr. Huang’s apparent modesty underscores the balancing act he must play between the world’s two largest economies as they compete for primacy over artificial intelligence. Three presidential administrations in Washington have tried to hold back China’s A.I. capabilities by cutting off the flow of advanced chips, including by restricting Nvidia’s sales to Chinese companies.
1.2
FT (07/16): Nvidia chief vows to ‘accelerate recovery’ of China sales as H20 chip ban lifted
Nvidia chief Jensen Huang said it would “accelerate the recovery” of its China sales, after a détente between Beijing and Washington allowed the leading AI chipmaker to resume shipments of a key processor specifically designed for the Chinese market.
Huang told a press conference in the Chinese capital on Wednesday that the company had not yet received export licences from Washington to restart shipments of its H20 product, but he expected them “to come through very shortly”.
Nvidia had reported a $4.5bn writedown in its April quarter, as the Trump administration tightened export restrictions on advanced chips and it was left with a huge H20 inventory it could no longer ship.
“The customers’ old orders have been cancelled. Their demands may have changed. We have to start the supply chain,” he added, noting that the process takes nine months.
1.3
WSJ (07/16): National-Security Concerns Tie Up Trump’s U.A.E. Chips Deal
Some Trump administration officials are holding up efforts to finalize a landmark agreement that would open the door to the United Arab Emirates buying billions of dollars in Nvidia’s cutting-edge artificial-intelligence chips, due to national-security concerns.
President Trump championed the agreement during a Middle East trip in May, and the sides hoped to work out the details quickly. Chip designer Nvidia looked forward to the sales.
Yet the countries haven’t been able to hash out the specifics to date, in part because some U.S. officials have expressed concerns that China could get access to the cutting-edge U.S. technology, people familiar with the talks said.
1.4
Reuters (07/17): China-linked hackers target Taiwan's chip industry with increasing attacks, researchers say
Chinese-linked hackers are targeting the Taiwanese semiconductor industry and investment analysts as part of a string of cyber espionage campaigns, researchers said on Wednesday.
While hacking to steal data and information about the industry is not new, there is an increase in sustained hacking campaigns from several China-aligned hacking groups, researchers with cybersecurity firm Proofpoint said in a new analysis, opens new tab.
2. Economy, Finance, and Business
2.1
FT (07/16): Chipmaking supplier ASML says Trump tariff impact ‘less negative’ than expected
Chipmaking equipment supplier ASML said the impact of US tariffs was “a bit less negative than we anticipated”, as artificial intelligence drove strong orders for its lithography machines.
Sales in the Netherlands-based company’s second quarter rose 23 per cent to €7.7bn, just ahead of analysts’ forecasts. Net bookings, a closely watched metric that includes orders for chipmaking gear placed by customers but not yet delivered, were €5.5bn, better than the €4.4bn analysts had expected, according to Visible Alpha, a research company.
However, ASML’s guidance for the third-quarter sales of €7.4bn-€7.9bn was less than the €8.2bn expected by analysts, and chief executive Christophe Fouquet said he “cannot confirm” whether the business — one of Europe’s largest technology companies by market cap — would grow overall next year.
2.2
Bloomberg (07/17): Japan Chipmaker Kioxia Sells $2.2 Billion of Bonds in Debut Deal
Chipmaker Kioxia Holdings Corp. sold $2.2 billion of US junk bonds in its first corporate debt issuance, becoming the latest Japanese firm to storm overseas credit markets.
The sale involves $1.1 billion each of five- and eight-year notes after initially targeting $1.5 billion of combined issuance, according to a person familiar with the matter. The bonds will respectively yield 6.25% and 6.625%, an eighth-point less than earlier price talk, said the person, who asked not to be identified as they’re not authorized to speak publicly.
3. Technology
3.1
TrendForce (07/17): NVIDIA Reportedly to Procure Up to 800,000 SOCAMM Modules in 2025 for AI Product
SOCAMM, dubbed “the next HBM” is beginning to gain traction in the market. According to ITHome, citing South Korean outlet ETNews, NVIDIA is expected to procure between 600,000 and 800,000 units of SOCAMM this year. Wccftech adds that demand is projected to accelerate further in 2026, driven by the introduction of the SOCAMM 2 modules.
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