Intel approaches China, despite US restrictions

intel visits china

It’s no secret that the United States and China are locked in a bitter trade battle whose effects are reverberating almost around the world. We are talking about an unprecedented confrontation at the economic level between the two largest economies in the world.  And, precisely, one of the axes of this complex situation inevitably passes through the technology industry.

The Asian giant, which has long been considered “the world’s factory”, is looking to break through beyond the manufacturing sector to develop, for example, projects powered by artificial intelligence. This ambitious plan, which will presumably have an impact on the country’s defense capabilities, has a major obstacle: the restrictions emerging from Washington.

Companies try to dodge the restrictions

One subtle (or perhaps not so subtle) way the US has used to slow Beijing’s progress in key areas like supercomputing has been to set new export rules for advanced technologies. The Department of Commerce has a list of products and services that cannot be sold to Chinese companies unless they have a license that is granted in very specific cases.

The truth is that companies have not stood idly by. The Asian market is one of its pillars for many, so limiting their commercial activity with China translates into a severe blow to their financial balances. Now, the strategy they are using is most interesting. Instead of trying to convince the agency to license them, they are offering alternative products.

This is the case for Intel, which due to the current economic climate is not in a position to sell its Max 1350 data center CPUs. The decision of the semiconductor company, according to Tom’s Hardware, has been to restructure its line of solutions for supercomputers with the launch of a new product, the Max 1450 CPU that is not affected by US restrictions.

Although Intel has not confirmed that the nature of this movement is to respond to its commercial interests in the midst of the trade war between the United States and China, the CEO of the technology, Pat Gelsinger, recently traveled to the lands of Xi Jinping. While he wasn’t greeted with fanfare like Tim Cook, he has been busy strengthening business ties with the Asian giant.

Gelsinger met with different Chinese officials, including Commerce Minister Wang Wentao, and emphasized the importance of this market. “Intel’s presence in China is very important, because the country is one of the largest markets in the world and also one of Intel’s most important markets,” said the executive, according to the local newspaper South China Morning Post.

And there is no doubt that China is important to Intel. According to data from Statista, the country is the second most important market in terms of revenue for the company, behind only the United States. Over time we will know how this commercial relationship evolves and what effect the trade restrictions of the Joe Biden administration have, which may even become more acute as time goes on.

It should be noted that Intel is not the only one that has changed its product catalog with the Asian market in mind. NVIDIA, another American semiconductor giant, has also released alternative GPUs. And, let’s remember, this piece of hardware is elementary for anyone who wants to, for example, train AI models. We know that China is in them, although the first results have not been so promising.

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