Daily: Xi-Trump did not discuss chips; H200 exports stall
6 min read.
Highlights
No chips at Xi-Trump meeting. In the second and final day of President Trump’s visit to China, USTR Jamieson Greer reported that there had not been any discussion of chip export controls between Xi and Trump. It seems Nvidia CEO Jensen Huang’s addition to the trip to China was a last minute addition based on the president’s personal invitation, so there hadn’t been much expectation of chip deals or discussions.
Reuters reports though the Washington has licensed approximately 10 Chinese companies to purchase Nvidia’s H200 chips, though no deliveries have been made yet. There haven’t been any signals from Beijing on whether they would allow the advanced chips, especially given national security conditions that the U.S. government have imposed on the deal.
Cerebras IPO pop. After hiking the prices of Cerebras shares right up until days and weeks before the IPO, the AI chip company IPO’d today at US$185. The stock shot up to US$350 before settling at US$311 at an 68% pop for the day. The company is valued at US$67 billion and bodes well for the slate of AI and chip IPOs to come this year.
Strike expected at Samsung. Concerns broil in South Korea as labour union talks at Samsung Electronics stall and a nationwide strike seems imminent. Samsung Electronics is the nation’s largest company and the world’s largest chipmaker. Government officials and corporate executives are eager to stave off a strike and resolve the labour issue as soon as possible. The company has already begun cutting its chip production. Samsung stock is down 7% today at the time of this writing.
Thanks for reading.
1. Policy and Geopolitics
1.1
Reuters (05/14): US clears H200 chip sales to 10 China firms as Nvidia CEO looks for breakthrough
The U.S. has cleared around 10 Chinese firms to buy Nvidia’s second-most powerful AI chip, the H200, but not a single delivery has been made so far, three people familiar with the matter said, leaving a major technology deal in limbo as CEO Jensen Huang seeks a breakthrough in China this week.
The stakes are significant, highlighting how the U.S.-China tech rivalry is now snarling even approved trade, leaving the world’s most valuable company and dominant chipmaker caught between dueling national priorities.
1.2
Reuters (05/15): Chip export controls not major topic in China talks, US trade rep Greer tells Bloomberg News
U.S. Trade Representative Jamieson Greer told Bloomberg TV in an interview on Friday that U.S. export controls on semiconductor chips were not a major topic of discussions with Chinese officials in Beijing.
The comments suggest a breakthrough on selling Nvidia’s advanced H200 chips to China remains far away, despite Nvidia CEO Jensen Huang’s last-minute invitation to U.S. President Donald Trump’s Beijing trip this week.
“This was not a major topic of discussion at the bilateral meeting. We did not talk about chip export controls at the meeting,” Greer said, adding that “15 to 17” U.S. CEOs present at Thursday’s meeting between Trump and Chinese President Xi Jinping spoke about their companies’ issues.
1.3
Korea Economic Daily (05/14): Samsung cuts chip output ahead of strike as over $67 bn disruption feared; union rejects talks
Samsung Electronics Co., the world’s top memory chipmaker, has begun scaling back semiconductor production ahead of a planned nationwide labor strike, taking emergency steps to cushion what industry officials warn could become one of the most disruptive industrial actions in South Korea’s modern corporate history.
1.4
Nikkei (05/14): India’s nascent semiconductor sector faces China’s push in older chips
Ahead of India’s first semiconductor fabrication plant coming online later this year, serious concerns have been raised by tech experts as China rapidly expands production capacity of mature-node chips -- the very segment New Delhi is betting on to build a domestic semiconductor ecosystem, with the new entrant set to face an uphill battle.
1.5
FT (05/14): Carmakers fear production hit after EU sanctions on Chinese chipmaker
EU carmakers fear chip shortages could cut production after a key Chinese supplier was hit with sanctions for selling military technology to Russia.
Two EU officials told the FT they were considering giving the industry an opt-out to prevent a crisis after businesses were banned last month from dealing with Yangzhou Yangjie Electronic Technology.
The executive said reliance on Yangjie had grown since last year’s crisis, which was triggered by the Dutch government’s move to take control of chip supplier Nexperia and oust its Chinese chief executive because of an alleged risk to supply.
2. Economy, Finance, and Business
2.1
NYT (05/14): A.I. Chip Maker Soars 68% in Market Debut, as Tech I.P.O.s Ramp Up
Cerebras, a Silicon Valley maker of A.I. chips, opened trading of its shares on the stock market at $350, far above its I.P.O. price of $185, before closing the day up 68 percent at $311.07. That put the company’s value at $67 billion. In the week leading up to its market debut, Cerebras had lifted its offering price twice from a preliminary $115 and increased the number of shares it made available to investors, raising at least $5.6 billion for itself.
That made Cerebras the largest public offering so far this year and the biggest tech debut globally since 2019, said Matt Kennedy, a senior strategist at Renaissance Capital, which follows I.P.O.s.
2.2
Bloomberg (05/15): OpenAI May Raise More Money as Compute Crunch Deepens, CFO Says
OpenAI Chief Financial Officer Sarah Friar said the ChatGPT maker may raise more capital even after completing what she described as the largest private fundraising round ever, as the company races to secure computing power to meet surging AI demand.
OpenAI’s recent $122 billion round has given the company “a lot of optionality,” Friar told Bloomberg TV in an interview, but added that future fundraising will depend on demand, revenue growth, cash flow and the gap between the computing power OpenAI needs and what it can afford. She also said public markets could be an attractive fundraising avenue over time because they are “significantly bigger” than private markets and could allow the company to tap a wider range of financing options.
2.3
Reuters (05/15): China’s SMIC says foreign clients shifting orders back to China
China’s top contract chipmaker, Semiconductor Manufacturing International Corp, on Friday said orders from overseas clients are increasing as the global artificial intelligence boom tightens capacity at foreign foundries.
“There are still quite a lot of semiconductor capacity expansion projects and companies in China,” co-CEO Zhao Haijun said during an earnings call. “These are among the few places with available production capacity, so we are seeing many overseas customers shift their orders to be manufactured in China.”
2.4
SCMP (05/14): Chinese foundries SMIC, Hua Hong forecast second-quarter growth amid AI boom
China’s leading semiconductor foundries, Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, expect their second-quarter sales to rise amid a dynamic global market defined by surging artificial intelligence demand and a memory supply crunch, while Hua Hong said it hopes this week’s Xi-Trump meetings could help relax US export controls.
2.5
Bloomberg (05/15): Applied Materials’ Sales Forecast Gets Boost From AI Demand
Applied Materials Inc., the largest US supplier of semiconductor equipment, gave sales and profit forecasts that far exceeded analysts’ estimates, fueled by soaring demand for AI computing and memory chips.
Revenue will be approximately $8.95 billion in the fiscal third quarter, which runs through July, Applied Materials said in a statement Thursday. Analysts had estimated $8.15 billion on average. Earnings will be about $3.36 a share, excluding some items, compared with a projection of $2.88.
The shares climbed about 2% in late trading after the results were released. They had been up 71% this year through the close, in line with the benchmark Philadelphia Stock Exchange Semiconductor Index.
3. Technology
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