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U.S. Cuts Off Intel, AMD, Nvidia From Selling To Chinese HPC Vendors

'It puts [Intel, AMD and Nvidia] in a bit of a dicey position,' because China is a major buyer of supercomputer components, a U.S. high-performance computing executive tells CRN of the government's latest move against China.

The U.S. government is seeking to curtail China's development of exascale supercomputers by prohibiting five major high-performance computing developers in that country from purchasing U.S. technologies, including components reportedly made by Intel, AMD and Nvidia.

The U.S. Department of Commerce announced on Friday that Sugon and three affiliates in addition to the Wuxi Jiagnan Institute of Computing Technology have been placed on its so-called "entity list" for "acting contrary to the national security or foreign policy interests of the United States." Among the affiliates is Higon, a company majority owned by Sugon that has a joint venture with AMD called THATIC, or Tianjing Haiguang Advanced Technology Investment, which is also on the list.

[Related: Supermicro On China Exit Story: We Have Been Expanding Capacity For Years]

The five HPC developers join Chinese telecom giant Huawei on the Commerce Department's entity list, which prohibits technology purchases from U.S. companies without government approval. While Huawei's blacklisting prompted many domestic companies to suspend business with the company, Intel, Qualcomm and Xilinx have reportedly lobbied the U.S. government to ease the ban.

"The tug of war escalates then," said Dominic Daninger, vice president of engineering at Nor-Tech, a Burnsville, Minn.-based HPC systems builder. "It puts [Intel, AMD and Nvidia] in a bit of a dicey position," he added, because China is a major buyer of supercomputer components.

In its announcement, the Commerce Department said Sugon, Wuxi Jiagnan Institute of Computing Technology as well as the National University of Defense Technology, which was added to its entity list in 2015, are China's three leading entities for development of exascale supercomputers. The agency added that all three have ties to the Chinese military.

The Wall Street Journal reported that Intel, AMD and Nvidia supply parts to Sugon.

"Sugon has publicly acknowledged a variety of military end uses and end users of its high-performance computers," the Commerce Department said. "Wuxi Jiangnan Institute of Computing Technology is owned by the 56th Research Institute of the General Staff of China’s People’s Liberation Army. "

An AMD spokesperson told CRN that the company is evaluating the addition of the five new entities on the entity list and "will comply with the regulations governing that list, just as we have complied with US laws to date." The spokesperson added that AMD is "reviewing the specifics of the order to determine next steps related to our joint ventures with THATIC in China."

An Nvidia spokesperson declined to comment as did a spokesperson for Intel.

The Commerce Department's announcement comes as the U.S. is racing China to build its first exascale supercomputers, which will be capable of performing at least 1 exaflop, or a quintillion floating-point computations per seconds, for a variety of modeling and simulation applications.

In the last three months, the U.S. Department of Energy announced that its first two exascale supercomputers are set for completion in 2021. The first project, Aurora, is being developed for the Argonne National Security Laboratory and will use next-generation Intel components. The second, Frontier, is being built for the Oak Ridge National Laboratory and will use next-generation AMD parts.

Nvidia is also becoming a major HPC player thanks to the artificial intelligence capabilities of its GPU hardware accelerators, which are increasingly being found in HPC workloads. Its GPU products are found in more than 120 of the world's top 500 supercomputers.

Daninger, the executive at Nor-Tech, said his company has sold HPC systems to U.S. government agencies for military purposes but could not disclose which agencies or what applications they're using. He said generally, however, that supercomputers could be used for cyber warfare campaigns to crack passwords and decrypt information as well as for nuclear and weapons engineering.

"Within commercial companies, we see them referred to as 'strategic weapons' for product development," Daninger said.

By mid-afternoon, Intel's stock price was up 0.34 percent to $47.34 per share, AMD's was down 2.55 percent to $29.24, and Nvidia's was down 1.34 percent to $152.03.

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