In China, where access to advanced chip technologies is severely restricted, repairs designed to extend the lifespan of existing chips have become a major industry. As a result of US export embargoes, Chinese technology companies are facing significant difficulties obtaining Nvidia accelerators, which are crucial for AI applications. This has led to the emergence of a repair and refurbishment industry.
China Makes Breakthrough in Chip Repair
The lack of technical support, particularly for high-performance AI chips like Nvidia’s H100 and A100, has created a new challenge for local companies specializing in this field. These companies operating in China repair and repurpose advanced chips that are damaged or experiencing performance issues. According to reports, some companies can repair up to 500 chips per month, with the cost per repair reaching as much as $2,800.
Repairs not only restore the functionality of chips but also extend their lifespan. This allows advanced chips, which are in limited supply due to embargoes, to remain functional for longer periods.
The growth in the sector reveals that a large spare parts supply chain operates in the background. The supply of microcomponents required for repairs depends on the sustainability of this chain.
However, it remains unclear whether this newly formed flow can continue in the long term. There are rumors that the US may consider new sanctions restricting spare parts used for repairs. This possibility could directly impact the already fragile China-based repair sector.
China previously almost completely shut down the used market for foundry machines, attempting to overcome a bottleneck in semiconductor production by collecting all available devices. Now, a similar strategy is being implemented to continue using advanced chips. These moves are noteworthy as part of China’s efforts to reduce its dependence on foreign sources for technology.
This development in China stands out not only as a repair activity but also as a significant example of the technological implications of geopolitical pressures.
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