The United States suppresses Huawei, Sugon and Intel are worse off than AMD

Following Huawei, the US Department of Commerce announced last week that it would add four Chinese companies and one Chinese research institute to the "blacklist", also known as the Entity List. These companies include Inspur, Tianjin Haiguang, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, and Wuxi Jiangnan Institute of Computing Technology. All five are domestic high-performance computing companies. The United States will further suppress China's technology industry.

Among the above five units, the Haiguang Group is more eye-catching because AMD announced in 2016 that it had reached an X86 licensing agreement with Haiguang Investment Company, licensing the then most advanced Zen architecture to the Chinese company. Afterwards, two joint ventures, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology, were established. Domestic X86 processors were also launched this year, covering multiple market segments including desktops and servers with 4 to 32 cores.

After being sanctioned by the United States, the development prospects of Hygon are unknown. AMD recently issued a statement saying, "AMD will comply with the specifications of the Entity List, just as AMD has always complied with U.S. law. AMD is currently reviewing the specific details of the list to determine the next steps for our joint venture with China's Hygon."

The US sanctions will obviously affect AMD's cooperation with domestic companies, but the impact of these two rounds of sanctions on AMD will not be significant, but the impact on Intel may be more serious. Mitch Steves, an analyst at the Royal Bank of Canada, recently published a report saying that the US crackdown on Chinese high-performance computing companies such as Huawei and Sugon will have a much greater impact on Intel than on AMD.

His reason is that AMD will launch the EPYC 2nd generation processor this year, which is the Rome processor with 64 cores and 128 threads, mainly for the high-end market and has little to do with Sugon.

But Intel is different. They dominate the mid- and low-end server chip market, accounting for 95% of the server processor market share, while Huawei and Sugon contribute 10% of Intel's server chip share. This is something Intel can hardly afford, and its Q3 revenue guidance will decline.

Intel has not responded to the RBC analyst's statement, but judging from past examples, these two events may indeed have a greater impact on Intel. In 2015, the United States announced sanctions against China's high-performance computing units, targeting the country's four major supercomputing centers, including the Guangzhou Supercomputing Center, which also meant that the Tianhe-2 supercomputer could no longer be upgraded with Intel chips.

The Tianhe-2 supercomputer originally used the Intel Xeon E5-2692 12-core processor and the Xeon Phi 31S1P accelerator card, with a total of 3.12 million cores, a theoretical performance of 54.9 PFLOPS (quadrillion times), and a Linpack peak performance of 33.86 PTFLOPS. Its performance remained unchanged from June 2013 to June 2016, and it won the TOP500 championship for six consecutive times.

The US ban meant that subsequent upgrades of Tianhe-2 could no longer use Intel products. At the end of 2017, Tianhe-2 began to use domestic alternatives, and the acceleration card was upgraded to the domestic Matrix 2000. Each accelerator card uses 4 Matrix 2000 chips. Each Matrix 2000 consists of 128 cores, with a frequency of 1.2GHz. It can execute 16 double-precision operations per cycle, and the processor has a peak performance of 2.45TFLOPS.

In addition to replacing the accelerator, the upgraded Tianhe-2A supercomputer has also improved key components such as network, memory, and storage. While the overall power consumption has slightly decreased, the performance has been increased from 54.9FLOPS to 94.97FLOPS.

For Intel, the application of their Xeon Phi accelerator card in the Tianhe-2 supercomputer should have been an excellent example of cooperation. Tianhe-2 is the champion of the TOP500 in six fields, but because of the sanctions, it can no longer be sold. Xeon Phi’s hope of expanding the market has also been shattered, especially in the large market of China. In the end, Intel also abandoned the Xeon Phi product line.