US tech firms grapple with latest curbs on China’s Inspur | Business and Economy

Inspur Group is the world’s third largest provider of servers used in data centers that operate cloud computing.

Nvidia Corp, Advanced Micro Devices Inc and other tech companies are vying to assess whether to halt sales to units made by China’s Inspur Group Ltd after it was placed on a US export blacklist last week.

The United States last week blacklisted Inspur for allegedly purchasing goods from the US to aid China’s military modernization efforts. The listing means companies cannot sell items to Inspur, e.g. B. Semiconductors made with US tooling unless they apply for and receive licenses, which are likely to be refused.

A spokesman for the US Department of Commerce told Reuters on Tuesday that it “will review and update the Inspur Group Co Ltd Entity List entry,” referring to the official name of the export blacklist.

AMD and Nvidia executives were questioned about deals with Inspur Group Co Ltd at an investor conference on Monday. AMD said it was seeking clarification on the rules.

Although not a household name, Inspur’s China-listed subsidiary reported sales of nearly 10 billion in 2021 third quarter 2022, the most recent available.

However, chip industry insiders and their advisors said companies are trying to assess whether to stop supplying Inspur’s subsidiaries, including Inspur Electronics Information Industry Co, which is not automatically subject to the restrictions.

U.S. regulators could consider unlicensed shipments to that subsidiary a violation of last week’s listing if there is a risk that the goods could get from the unlisted subsidiary to the listed parent company. Inspur Electronics Information Industry Co has the same corporate address as the blacklisted parent company.

“Shipments to related companies pose 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 was “strongly opposed” to Inspur and 27 other companies being blacklisted.

A spokesman for China’s foreign ministry also said last week that the US was “again cracking down on Chinese companies under false pretenses and unfair means.”

Inspur listing more restrictive

Dan Fisher-Owens, an export lawyer at Berlin-based Corcoran & Rowe who works with chip companies, said many of his clients have suspended shipments to Inspur’s subsidiaries to assess the situation.

Colette Kress, Nvidia’s chief financial officer, said Monday at an investor conference in San Francisco, Calif. that the company will “follow export controls very closely,” but didn’t comment on whether Nvidia has stopped shipping to Inspur subsidiaries.

“We’ll probably work with other partners,” Kress said. An Nvidia spokeswoman declined to comment beyond her comments.

An AMD spokesperson did not respond to a request for additional comment on comments made by AMD Chief Technology Officer Mark Papermaster at the same conference.

Inspur’s listing is even more restrictive than many other companies on the US Commerce Department’s “entity list” and could be comparable to the restrictions imposed on China’s blacklisted telecom company Huawei Technologies, one with the matter said familiar person.

As with Huawei, the listing restricts products from being shipped to Inspur, even if they’re made in a foreign country but with US technology. Those products also can’t go to Inspur’s subsidiaries if the blacklisted parent company is considered a party to the transaction under a broad definition of the term, the person said.