US Allows ZTE Unit to Purchase Nvidia, AMD Chips

The US Department of Commerce has granted ZTE Kangxin, a subsidiary of Chinese telecommunications equipment provider ZTE, a license to purchase chips from American semiconductor manufacturers Nvidia and AMD. The Bureau of Industry and Security (BIS) issued the license on July 22, which will remain valid for 12 months.

This authorization allows ZTE Kangxin to continue its sourcing from these two prominent chip makers, offering a significant reprieve for the company, which has faced US trade restrictions. A spokesperson for the BIS confirmed the existence of the license, following an initial report by The Wall Street Journal.

The US has implemented measures that restrict entities deemed to be involved in activities contrary to national security from using American technology or software. ZTE, one of the world's largest telecom equipment manufacturers, has been subject to these US export restrictions since 2016.

The newly granted license enables ZTE Kangxin to access critical components necessary for its product manufacturing. The authorization becomes effective immediately upon issuance and is intended to alleviate disruptions within ZTE's supply chain.