China tightens chip import checks to curb reliance on Nvidia, US tech

China's chip inspections, which were initially limited to Nvidia's modified AI chips, have now expanded to cover all advanced semiconductor products

China has intensified its control over chip imports as part of its broader push to reduce reliance on American technology, particularly Nvidia’s artificial intelligence (AI) processors, according to a report by Financial Times.

 

Teams of customs officers have been deployed at major ports across the country in recent weeks to conduct strict inspections of semiconductor shipments, the news report said.

 

The move comes after Chinese regulators urged domestic technology companies to stop ordering Nvidia’s China-specific chips. The targeted processors, including Nvidia’s H20 and RTX Pro 6000D, were designed to comply with US export controls while helping Nvidia maintain its foothold in China.   

 

Checks expand to cover all advanced chips

 

Initially, the inspections focused on ensuring that local firms followed regulatory guidance to halt purchases of Nvidia’s modified AI chips. However, one source told Financial Times that the scrutiny has since broadened to include all advanced semiconductor products. The expanded checks aim to prevent the smuggling of high-end chips that violate US export restrictions.

 

Until now, Chinese customs had largely allowed chip imports as long as the proper duties were paid. But authorities have become more vigilant after reports showed that at least $1 billion worth of Nvidia’s top AI chips were smuggled into China between May and July, the news report said.

Push to support domestic chipmakers

 

The tougher border checks highlight Beijing’s efforts to make its technology ecosystem less dependent on American hardware. China is channelling its efforts into developing a robust domestic semiconductor industry to match global standards in performance and manufacturing capacity.

 

In some cases, customs officials have also investigated whether companies falsely declared their imports of advanced chips in previous shipments, the news report said.

 

Firms under scrutiny

 

Last week, the Financial Times reported that Tower Research, a US quantitative trading firm, is under investigation for alleged smuggling of advanced chips and hardware. The probe is part of the same wave of enforcement measures introduced under the new import regime.

 

TheCyberspace Administration of China (CAC), the country’s top internet watchdog, instructed tech giants like ByteDance and Alibaba in mid-September to stop all testing and orders for Nvidia products. The new customs checks are being carried out in coordination with the CAC, Financial Times reported.   

 

China bets on homegrown chips

 

Beijing’s latest actions signal growing confidence in its domestic semiconductor industry. Officials believe local chips now rival Nvidia’s China-specific processors in performance.

 

China also plans to triple production of advanced semiconductors next year, aiming to fill the gap left by restricted Nvidia sales, the Financial Times report said.

 

While Nvidia has excluded China from its future revenue forecasts, the company earned $4.6 billion from selling its H20 chips in the first quarter of this financial year, before the US temporarily halted exports to the country.