China tightens chip import controls to cut reliance on Nvidia AI processors

China has intensified enforcement of semiconductor import controls, targeting Nvidia’s AI chips as part of a broader push to reduce reliance on US technology.

Customs officials have launched stricter inspections at major ports, initially focused on Nvidia’s China-specific H20 and RTX Pro 6000D chips, and have recently expanded to all advanced semiconductors to curb smuggling and enforce US export restrictions.

The move follows regulatory guidance from the Cyberspace Administration of China (CAC), which directed tech giants like ByteDance and Alibaba to halt purchases and testing of Nvidia products. The crackdown also includes probes into potential false import declarations and investigations into firms like US trading firm Tower Research.

The Financial Times reported that over $1 billion worth of high-end Nvidia chips were smuggled into China between May and July. Authorities are now coordinating efforts to bolster domestic chip production, aiming to triple output in 2026 and compete with U.S. firms in AI development.

Nvidia, which made $4.6 billion from Chinese sales of the H20 in Q1 before US restrictions tightened, has excluded China from its future revenue forecasts. Both China’s customs agency and Nvidia declined to comment.

By Sabina Mammadli