Late last week, the U.S. Department of Commerce American companies to cooperate with five Chinese companies and organizations, and this time the sanctions list included two AMD joint ventures, as well as the computer and server manufacturer Sugon, which only recently began equipping its products with licensed “clones” of AMD processors with the first generation Zen architecture. Representatives of AMD expressed their readiness to submit to the demands of the American authorities, but so far have not said anything concrete about further cooperation with Chinese partners.
Clones of EPYC and Ryzen processors, which are produced outside China by order of Hygon, already appeared in our news at the end of last month. These processors were produced under a license from AMD, which it provided to Chinese partners for $293 million, simultaneously receiving 51% of the shares in the Haiguang Microelectronics Co joint venture, and 30% of the shares in the Chengdu Haiguang Integrated Circuit Design enterprise, which nominally develops processors under the AMD license. However, the available data on the characteristics and architectural features of Hygon brand processors allows us to assert that they differ from their American prototypes mainly by their support for data encryption algorithms specific to China.
According to the publication , it was the exclusion of data encryption blocks from the licenses transferred to the Chinese that at one time allowed AMD to avoid the increased attention of the American authorities to the deal with THATIC. The competent US authorities are quite jealous of the export of technology, and the ability of Chinese partners to produce high-performance server processors would increase competition in the global market for supercomputer systems. It is generally accepted that the formal reason for the recent ban on cooperation with Sugon was the company’s statements about its intentions to use server systems of this brand to meet the defense needs of the PRC.
Some US government agencies initially did not like AMD's initiative to create joint ventures with the Chinese. Lisa Su went to negotiations with Chinese officials literally in her first month as head of AMD, and by February 2016 the deal was concluded. As we now know, AMD did not participate in these joint ventures with funds, but provided only intellectual property rights. The US Department of Defense even then tried to force AMD to approve the deal through the Committee on Foreign Investment, but the company argued its refusal for several reasons. First, she argued that such a joint venture structure was not subject to mandatory approval by the Committee. Secondly, it stated that it was not transferring the most modern technologies to the PRC. Thirdly, it excluded from the license the possibility of Chinese partners using processor units responsible for data encryption.
The American authorities were also concerned about the confusing ownership structure of joint ventures created by AMD with the Chinese side. The American company stated that such a structure is designed to take into account the interests of Chinese partners, but at the same time does not contradict US laws. For example, the company in which AMD controlled no more than 30% of the shares was responsible for the development of processors in the joint venture. This allowed the Chinese authorities to consider Hygon processors as a “domestic development”, which is even stated on their cover - “developed in Chengdu”. Next to it is the “made in China” stamp, although it is obvious that AMD’s Chinese partners only place orders for the production of these processors, and they are presumably produced by GlobalFoundries at their factories in the USA or Germany.
AMD emphasizes that even before concluding the deal with THATIC, in 2015, it gradually and in detail informed the competent authorities about the progress of negotiations, but they did not find any serious obstacles to the creation of a joint venture and the transfer of a license for the development of x86-compatible processors. Experts believe that without the help of AMD and other American partners, the Chinese side will not be able to produce processors with the Zen architecture indefinitely. More modern AMD architectures were not transferred to Chinese developers for use under this deal. In the first quarter of this year, AMD managed to receive $60 million in licensing fees from Chinese partners, as they began producing Hygon processors for servers and workstations. According to the terms of the deal, they should not be sold outside of China, but now US authorities see a threat to national security even in the use of these processors within China.
It is noteworthy that AMD honored the publication of The Wall Street Journal with a separate comment on the pages . The company said it has taken all necessary measures to prevent the misuse of technologies and developments transferred to the Chinese side, as well as to make it impossible to “reverse engineer” in order to independently develop future generations of Chinese processors. Since 2015, the company has carefully coordinated its actions with relevant American departments, and they have found no reason to ban the creation of joint ventures with Chinese partners. The technologies transferred to the Chinese, according to her, made it possible to create processors that were inferior in speed to other products available on the market at the time the deal was concluded. AMD now operates in strict accordance with American law, and does not allow the transfer of technology to companies included in the sanctions list, and has also stopped trade exchanges with them.
Source: 3dnews.ru