As an added bonus, it would be funny if China passes a tariff on exported X86 chips from US to China.
And AMD dodges the tariffs because of their partnership with 51% owned CHMT holding company which partners with THATIC,that owns Chinese Hygon to make the Dhyana, which is a near identical clone of AMD’s licensed Epyc server processor, with AMD getting a royalty cut.
What is AMD up to?
The Chinese government is currently trying to reduce its dependence on American technologies due to national security concerns, while subsidizing the growth of its domestic tech companies. China still buys plenty of CPUs from Intel since its Xeons are still considered the “best in breed” processors for data centers, but US regulators banned Intel from selling its top chips to China’s supercomputer centers in 2015.
That’s why China isn’t eager to embrace another American chipmaker like AMD. In response, AMD established two joint ventures with Chinese holding company THATIC — one with Chengdu Haiguang Microelectronics Technology (CHMT), and another with Haiguang IC Design, also known as Hygon.
AMD owns a majority stake in CHMT, which ensures that its IP isn’t transferred to THATIC. THATIC owns a majority stake in Hygon, which licenses AMD’s IP from CHMT. Hygon designs the chips, and CHMT produces the chips through a suitable foundry and then sends them back to Hygon for packaging, marketing, and sales.
This arrangement seemingly placates American and Chinese regulators — AMD’s IP isn’t being passed to a Chinese company, and a Chinese chipmaker gains access to superior data center CPU designs. AMD generates less revenues through these JVs than it would through direct sales, but it still gains a foothold in China’s massive data center market. But more importantly, this move could wound Intel.
Why Intel should be worried
AMD’s Epyc arrived only a year ago, but it’s already causing headaches for Intel. Benchmarks found that it could outperform comparable Intel CPUs in certain high-performance computing and big data applications that require CPU cores to operate independently.
Many big companies, including Microsoft and Baidu, started installing AMD’s cheaper chips in their data centers. In a meeting with Nomura Instinet analyst Romit Shah in June, then-CEO Brian Krzanich admitted that AMD was gaining ground, and Intel was trying to prevent it from gaining a “15% to 20%” share of the data center market.
That admission was stunning, since Intel traditionally controlled more than 99% of the data center market with its Xeon chips. Intel’s data center group grew its revenues by 11% to $19.1 billion last year, and accounted for 30% of its top line.
Epyc was already a thorn in Intel’s side, but AMD’s sponsorship of Chinese clones could throttle its sales in mainland China, which accounted for 24% of its sales last year. Its total sales in the region only rose 6% in 2017, compared to 20% growth in 2016.
…Well at least until AMD’s server chip design gets stolen by the olding company and given to the other company that makes them…which could have already happened….
