By Karen Freifeld and Stephen Nellis
(Reuters) -Nvidia Corp, Advanced Micro Devices Inc and other U.S. firms are scrambling to assess whether they must halt sales to units of China’s Inspur Group Ltd after its addition to a U.S. export blacklist last week.
The United States last week added Inspur to its trade blacklist for allegedly acquiring U.S.-origin items in support of the China’s military modernization efforts. The listing means that companies cannot sell Inspur items like semiconductors, which are made with U.S. tools, unless they apply for and get licenses, which are likely to be denied.
Inspur did not return a request for comment.
A U.S. Department of Commerce spokesperson told Reuters on Tuesday that it is reviewing Inspur Group Co Ltd’s entity listing and will update it as appropriate.
While not a household name, Inspur’s Chinese-listed traded subsidiary had nearly $10 billion in sales in 2021 and Inspur Group is the world’s third-largest supplier of the servers used in data centers that power cloud computing, according to data from IDC from the third quarter of 2022, the most recent available.
But chip industry insiders and their advisers said firms are trying to assess whether they must halt supplying Inspur’s subsidiaries, including Inspur Electronics Information Industry Co, which is not automatically subject to the restrictions.
U.S. regulators could view unlicensed shipments to that subsidiary as a violation of last week’s rules if there is a risk of diversion from the unlisted subsidiary to the listed parent. Inspur Electronics Information Industry Co has the same corporate address as the blacklisted parent company.
“Shipments to related entities constitute a ‘red flag’ due to the risk of diversion,” the Commerce Department spokesperson said in a statement.
(Reporting by Karen Freifeld; Editing by Mark Porter and Anna Driver)
