CITIC Securities: The United States adjusts AI chip regulation rules, with a clear direction for autonomy and control.

CITIC Securities research report pointed out that while the Trump administration in the U.S. revoked the Biden administration's "Artificial Intelligence Diffusion Export Control Framework" rules, it simultaneously issued three compliance guidelines regarding overseas AI chip export control regulations, simplifying the rules while further strengthening the enforcement, maintaining high-pressure measures on China's AI development, and reflecting a future expansion of enforcement thinking. On one hand, the related measures have certain expected repairs for overseas AI chains such as NVIDIA. On the other hand, the core response direction domestically remains to strengthen self-control and domestic Computing Power, building China's AI Supply Chain and technology system. Continuous recommendations for self-control related domestic wafer foundry, Computing Power chip design, semiconductor equipment, and advanced packaging industry chain, while in the short term, focus on sentiment repair opportunities for the NVIDIA chain.

Electronic | The US adjusts AI chip regulation rules, clarifying the direction of self-control.

The Trump administration in the United States, while abolishing the Biden administration's "Artificial Intelligence Diffusion Export Control Framework" rules, has separately issued three compliance guidelines regarding export controls on overseas AI chips. This move simplifies the regulations while further strengthening the enforcement, maintaining high-pressure measures against China's AI development, and reflecting a future expansion in enforcement thinking. On one hand, the relevant measures are expected to repair overseas AI chains such as Nvidia to some extent. On the other hand, the core response direction domestically remains to strengthen independence and control, and to build China's AI supply chain and technology system. Continuous recommendations are made for domestic wafer foundries, computing power chip design, semiconductor equipment, and advanced packaging industry chains related to independent control, while in the short term, attention should be paid to sentiment recovery opportunities in the Nvidia chain.

▍Event:

On May 13, 2025, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") announced the repeal of the temporary rules for the "Artificial Intelligence Diffusion Export Control Framework" that were issued by the Biden administration on January 13, 2025. At the same time, BIS released three compliance guidelines regarding the export control regulations for overseas AI chips, in order to maintain the export control oversight on AI chips and AI applications related to China despite the repeal of the aforementioned rules.

Overall, the changes mentioned above show the differences in the export control policy理念 between the Trump administration and the Biden administration.

The Trump administration is pushing for export controls to move towards a "simpler and more aggressive" direction, simplifying rules while strengthening the intensity of export controls. The impact of this adjustment is, on one hand, to relax the global sales of products from U.S. AI chip companies to maintain the leadership of the U.S. AI technology system worldwide; on the other hand, it still comprehensively blocks the Chinese AI system, expands potential law enforcement targets, and strengthens long-arm jurisdiction and extraterritorial enforcement. Short-term related adjustments may have expectations for repairs overseas, but do not change the strategic determination of autonomous and controllable as the main line.

1) The Biden administration's AI diffusion framework was repealed before the official implementation of May 15, which is an expected event. The upfront rules have been met with a lot of opposition from the industry due to their complexity and hindering commercial activities (such as the "quota system" for AI chips in most countries). After the abolition, the restrictions on the delivery of goods by enterprises to most countries will be relaxed, and the suppression of NVIDIA's industrial chain in the short term is expected to ease. Recently, Nvidia GB200 has entered the stage of mass production and shipment, and GB300 is expected to enter the release cycle at the end of Q3, and the supply bottleneck will gradually ease. At the same time, NVIDIA announced that it has signed a $90 billion strategic cooperation with Humain, a subsidiary of Saudi Arabia's sovereign wealth fund, to supply 18,000 GB300 Blackwell superchips to Saudi Arabia for the construction of AI data centers. The partnership is expected to strengthen Nvidia's dominance in the AI chip market outside of China and the United States. In addition, the Financial Times reported that Nvidia plans to set up a research and development center in Shanghai, which also strengthens Nvidia's adaptation and efforts to the Chinese market, that is, under the US export control policy, to seek ways to better meet the customized needs of Chinese customers, and will also inject technological upgrading momentum into the entire Chinese AI chip industry.

2) With the repeal of the bill, BIS has also published a number of interpretation details to further strengthen and expand the scope of law enforcement against China's AI chips and models, and long-term autonomy and controllability is the only way. It is worth noting that the three compliance guidelines released this time are not legislative activities, but an extension, interpretation and restatement of previous regulations and policies, which to a certain extent clarifies the potential enforcement direction of BIS in the future. On the one hand, for the so-called Chinese AI chips that meet the 3A090 standard produced in violation of EAR rules (Huawei Ascend is named in the detailed rules, but not limited to Huawei, and the list may be updated in the future) is restricted to any place of use, and the previous expression focused on chip manufacturing and trading, but this guidance clarifies that violations can involve all parties, whether it is sales, transfer, export, re-export, financing, purchase, order, elimination, storage, provision of loans, disposal, freight forwarding, or provision of any form of service. BIS can impose penalties on the parties involved. On the other hand, chips that meet the 3A090 standard are restricted to training large Chinese models with a certain scale of operations (1026 operations), or the scrutiny of cloud vendors and data centers may be strengthened. For AI developers and data centers outside of China and the United States, it may be necessary to strengthen relevant compliance assessments in the future.

Overall, the starting point of this announcement is still to continue the strict blockade on AI chips and chip manufacturing capabilities entering China, while appropriately relaxing restrictions in regions outside of China, in order to hinder the expansion of Chinese AI large models and domestic Computing Power chips. Essentially, it remains a comprehensive blockade on Chinese AI. This adjustment also reflects, to some extent, BIS's subsequent enforcement thinking of expansion, and it is not ruled out that new regulations may be introduced in the future to cooperate with this. We believe that the long-term response direction still needs to strengthen self-control and domestic Computing Power, to build the Chinese AI Supply Chain and technology system, in order to fundamentally solve this problem.

▍Risk Factors:

Downstream demand recovery is below expectations, changes in the international industrial environment and intensified trade frictions, our advanced technology innovation is not as expected, the risk of insufficient supply of advanced process capacity, the capital expenditure of major internet companies is below expectations, the progress and intensity of related industrial policies are not as expected, the development of AI technology and applications is not as expected, and intensified industry competition, etc.

Investment Strategy.

We believe that in the short term, adjustments to U.S. policies will benefit the expectation repair of overseas AI chains such as Nvidia; in the medium to long term, the high-intensity regulatory measures by the U.S. will help accelerate the domestic substitution of China's AI industry. We recommend focusing on four key areas: wafer foundry, Computing Power chip design, domestic equipment and components, and advanced packaging.

1. The wafer fab has a core strategic asset position for advanced domestic substitution of semiconductors.

2. Computing Power chip design companies are accelerating the construction of a local technology system. It is recommended to follow companies that have a faster layout of domestic processes.

3. The trend of localization in equipment companies is clear, with a priority on following companies that possess advanced processes, platformization, and low rates of localization in their segments.

4. Advanced packaging plays a role in enhancing the AI chip field, with continuous technological iteration space in the 2.5D/3D/HBM related directions. It is recommended to follow domestic manufacturers that are laying out advanced packaging.

5. With the gradual increase in the volume of NVIDIA's GB200, the GB300 is expected to enter the shipping cycle by the end of Q3, alleviating supply bottlenecks and providing opportunities for performance growth in the Supply Chain.

(Source: People's Financial News)

Source: Eastmoney

Author: People's Financial News