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Gavekal Technologies, Chips
From Tariff Truce To Tech War
Laila Khawaja
4 Jun 2025
Optimism from the US-China Geneva talks quickly faded as both sides accused each other of breaching the agreement. The Trump administration wants greater access to the China market, but is closing its own doors with expanding tech export controls. The latest, targeting electronic design automation tools, hit after Huawei and Xiaomi unveiled new chip breakthroughs.
Gavekal Technologies, Chips
Amid Sanctions And Sanction Threats
Laila Khawaja
29 May 2025
China threatens legal counter to US export controls. Malaysia’s Huawei AI deal proceeds despite US pressure. And Tencent shrugs off the impact from US chip ban.
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Chinese Firms Advance Amid Escalating Sanctions
Xiaomi’s 3nm self-developed mobile SoC is ready. Xiaomi’s founder and CEO Lei Jun on May 19 announced Xiaomi’s Xring O1 mobile SoC on his Weibo, China’s equivalent for X.
After The Tariff Truce
US and China have agreed to a tariff truce. Washington and Beijing on May 12 issued a joint statement following weekend-long marathon talks between senior trade officials in Geneva.
What Export Controls Miss
Nvidia CEO Jensen Huang recently warned that expansive export controls could undermine US AI dominance —he makes a valid point. US export controls miss one important factor: Chinese firms used to superior foreign tech lacked market incentives to adopt inferior local substitutes. However, as foreign tech is cut off, export controls paradoxically force local innovation. As Chinese alternatives mature, they could ultimately pose a competitive threat to foreign tech in global markets.
Huawei Has More Chip Surprises
Beijing protects domestic industries with tariff exemptions. TSMC’s Arizona losses risk US chipmakers’ profitability. Huawei plans new AI chip with SMIC’s 6nm process.
Huawei’s DeepSeek Moment In AI
Huawei’s latest AI cluster overcame chip-level constraints with system-level innovations. Nvidia has suspended more chip sales to China, though grey-market channels remain active. And Xiaomi’s tech progress in mobile SoC using TSMC’s advanced tech could make it a US sanction target.
Fighting Till The End
Beiing has tightened its chip tariff rule that targets made-in-America chips. US-based integrated device manufacturers are expected to bear the brunt of the impact. Also, the move to restrict H20 sales to China signals President Trump’s increasing pressure on big tech, while clearing the path for Beijing to accelerate domestic chip adoption. Nvidia is unlikely to quickly replace the significant lost revenue amid tariff uncertainties. Finally, Beijing is likely leveraging the antitrust probe to pressure DuPont into withdrawing its legal complaint against its Chinese competitors.