Nvidia and AMD’s ‘special treatment’ from Trump is shaking up an already tangled global chip supply chain

Nvidia’s chips may be designed and sold by a U.S. company, but they’re manufactured by Taiwan’s TSMC, using chipmaking tools from companies ASML, which is based in the Netherlands, and Japan’s Tokyo Election, and using components from suppliers South Korea’s SK Hynix

Washington has also pressured major transshipment hubs, Singapore and the United Arab Emirates, to more closely monitor chip shipments to ensure that controlled chips don’t make their way to China in violation of U.S. law

Within the U.S., discussion of Trump’s Nvidia deal has focused on what it means for China’s government’s and Chinese companies’ ability to get their hands on cutting-edge U.S. nology

But several other countries and companies are ly studying the deal closely to see if they might get an opening to sell to China as well

Trump’s Nvidia deal “tells you that [U.S.] national security is not really the issue, or has never been the issue” with export controls, says Mario Morales, who leads market re firm IDC’s work on semiconductors

Companies and countries will “bably have to revisit what their strategy has been, and in some cases, they’re going to break away from the U.S. administration’s policies.” “If Nvidia and AMD are given special treatment because they’ve ‘paid to play’, why shouldn’t other companies be doing the same?” he adds

Getting allies on their side The Biden administration spent a lot of diplomatic energy to get its allies to agree to limit their semiconductor exports to China

First, Washington said that manufacturers TSMC and Intel that wanted to tap billions in subsidies could not expand advanced chip duction in China

Then, the U.S. pushed for its allies to impose their own sanctions on exports to China. “Export controls and other sanctions efforts are necessarily multilateral, yet are fraught with collective action blems,” says Jennifer Lind, an associate fessor at Dartmouth College and international relations expert. “Other countries are often deeply unenthusiastic telling their firms—which are positioned to bring in a lot of revenue, which they use for future innovation—that they cannot export to Country X or Country Y.” This translates to “refusing to participate in export controls or to devoting little or no effort to ensuring that their firms are adhering to the controls,” she says

Paul Triolo, a partner at the DGA-Albright Stonebridge Group, points out that “Japanese and Dutch officials during the Biden administration resisted any serious alignment with U.S. controls,” and suggests that U.S allies “will be glad to see a major stepping back from controls.” trade negotiations between the U.S. and its trading partners could weaken export controls further

Chinese officials may demand a rollback of chip sanctions as part of a grand bargain between Washington and Beijing, similar to how the U.S. agreed to grant export licenses to Nvidia and AMD in exchange for China loosening its controls on rare earth magnets

Japan and South Korea may also bring up the chip controls as part of their own trade negotiations with Trump. ‘Expect continuing diversions’ A separate issue are controls over the transfer of Nvidia GPUs

The U.S. has leaned on governments Singapore, Malaysia and the United Arab Emirates to prevent advanced Nvidia cessors from making their way to China

Scrutiny picked up in the wake of DeepSeek’s surprise AI release earlier this year, amid allegations that the Hangzhou-based startup had trained its powerful models on Nvidia cessors that were subject to export controls. (The startup claims that it acquired its cessors before export controls came into effect)

The leading-edge cessors, Nvidia’s Blackwell chip, cannot be sold to China

That means chip smuggling will continue to be a concern for the U.S. government

Yet “enforcement will be spotty,” Triolo says. “The Commerce Department lacks resources to track GPUs globally, hence expect continuing diversions of limited amounts of GPUs to China via Thailand, Malaysia, and other jurisdictions.” Triolo is, instead, focused on another loophole in the export control regime: Chinese firms accessing AI chips based in overseas data centers. “There is no sign that the Trump Commerce Department is gearing up to try and close this gaping loophole in U.S. efforts to limit Chinese access to advanced compute,” he says

How much will the global supply chain change? Not all analysts think we’ll see a complete unraveling of the export control regime. “The controls involve a complex multinational coalition that all parties will be hesitant to disrupt, given how uncertain the results will be,” says Chris Miller, author of Chip War: The Fight for the World’s Most Critical nology

He adds that many of these chipmakers and suppliers don’t have the same political heft as Nvidia, the world’s most valuable company

Yet while these companies may not be as politically savvy as Nvidia, they’re just as important

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