Teams of customs officers have been dispatched to major ports to perform rigorous inspections of chip shipments, according to three people with knowledge of the clampdown. The checks began with a focus on Nvidia’s China-only chips after regulators instructed local firms to stop ordering them.
The targeted processors, the H20 and RTX Pro 6000D, were watered-down versions made to comply with US export restrictions while keeping the Silicon Valley chipmaker’s foot in the Chinese market.
However, one source said the scrutiny has since widened to all advanced semiconductor imports, aiming to catch both smuggled hardware and products that flout US export controls.
Until recently, Chinese customs seemed more concerned with collecting duties than with stopping such shipments. The Financial Times reported that around $1 billion worth of Nvidia’s top AI chips had slipped through the net and been sold in China between May and August.
Beijing’s latest move shows how determined it is to stop its tech sector relying on American components and instead fuel its domestic chipmaking ambitions. Officials want local suppliers to close the performance and capacity gap with US players as quickly as possible.
In addition to tighter border checks, some customs officers are reviewing whether firms previously submitted false import declarations for high-end chips, said two people familiar with the investigations.
The FT revealed that US trading outfit Tower Research had been investigated for allegedly smuggling advanced chips into the country, part of this sweeping new crackdown.
According to those familiar with the matter, the Cyberspace Administration of China, the powerful internet regulator, told tech giants including ByteDance and Alibaba in mid-September to stop ordering and testing Nvidia’s products. The border inspections are said to be a coordinated effort with the CAC.
The order came only two months after Nvidia’s export ban on the H20 was lifted by the Trump administration. At the same time, Nvidia introduced the RTX Pro 6000D, another neutered AI chip meant to keep the Chinese market warm.
Senior officials in Beijing now appear convinced that homegrown chips can match Nvidia’s tailored China variants. China is planning to triple its production of advanced semiconductors next year to meet demand left behind by Nvidia’s retreat.
While Nvidia has scrubbed China from its future revenue forecasts, the company still booked $4.6 billion in the first quarter of this fiscal year from selling the H20 in what was once its fourth-largest market, before the US imposed temporary restrictions.