Semiconductors

Export channels that relied on mismatched allied rules will face sharply narrowed legal options, forcing suppliers to treat previously tolerated cross-border shipments as high-risk or impermissible. The legislation builds a deadline-driven diplomatic process that speeds multilateral alignment and raises the prospect of near-term unilateral enforcement actions.

Purchases of H200 chips in China must now flow through authorised, licensed channels rather than open-market routes. Procurement teams that do not finalise orders via those channels risk being excluded from initial shipment allocations.

A February 26 Commerce Department notice proposing implementation of the draft rule was pulled back. The draft would have required government approval for exports of high-end processors and tightened controls on advanced AI chips. A US official characterized the measure as a draft and said discussions were preliminary. The draft was presented as part of efforts to limit China’s access to cutting-edge semiconductor technology and followed a decision to discard a Biden-era regulatory framework.

Chinese purchasers cannot rely on newly manufactured H200 shipments and must draw on existing inventories or domestic alternatives. Contracted orders that assumed continued supply now face delivery uncertainty and narrower procurement windows.

Beijing issued conditional export licenses covering purchases of Nvidia H200 chips. The licenses granted allow ByteDance, Alibaba, and Tencent to buy more than 400,000 H200 chips in total. Additional conditional approvals are expected in the coming weeks. U.S. export controls had previously barred sales of chips such as the H200 to Chinese customers.

Washington will lower tariffs on Taiwanese goods to 15 percent from a 20 percent reciprocal rate, and cap sector-specific tariffs on Taiwanese auto parts and wood products at 15 percent. Taiwanese chip and tech businesses are set to make new direct investments totalling at least $250 billion in the United States, and Taiwan will provide credit guarantees of at least $250 billion to facilitate additional investment. Taiwan’s government said the new tariff will not stack on top of existing duties, and a Taiwanese machine tool executive said his company cannot absorb the tariff for US customers given single-digit profit margins. US officials also announced a 25 percent duty on certain semiconductors meant to be shipped abroad, described as a step allowing Nvidia to sell advanced AI chips to China.