China Announces Preliminary Probe Saying NVIDIA 'Violated China's Antitrust Law'

2020 Mellanox acquisition and related contracts

Specific details of the violation not disclosed

China's market regulatory authority announced on the 15th (local time) the results of a preliminary investigation that NVIDIA violated China's antitrust law. The agency said it will continue further investigations into NVIDIA. NVIDIA's shares fell about 2% in pre-market trading in the U.S. on that day.

According to Bloomberg on the 15th, China's State Administration for Market Regulation (SMA) has launched an investigation into NVIDIA regarding the acquisition of Mellanox, which NVIDIA acquired in 2020, and certain contracts concluded in the acquisition process. Mellanox is an Israeli technology company that develops network solutions for data centers and servers. At the time, China approved the deal under certain conditions.

The State Administration for Market Regulation SAMR said in the preliminary investigation that NVIDIA violated China's antitrust law in relation to the acquisition and its conditions. However, the regulator did not specify how NVIDIA violated Chinese law.

Earlier, on the 13th China launched two separate investigations into semiconductors. One is an anti-dumping investigation related to certain analog IC chips sold by U.S. Texas Instruments and Analog Devices. At the same time, the Ministry of Commerce launched an anti-discrimination probe regarding U.S. restrictive measures on China's semiconductor industry.

The Chinese government announced this investigation immediately after the U.S. added 23 Chinese companies to the trade-restricted companies list.

SAMR's update is likely to complicate the trade talks between U.S. and Chinese officials that began in Madrid, Spain.

Kim Jeong-a, contributing reporter kja@hankyung.com