U.S. Forces Intel to Pause Shipments to Leading Server Maker

[harlan4096]

The US government tightens restriction on China

According to a report from Globaltimes.cn, Intel has suspended shipments to Inspur, and the company supplied us with a more in-depth statement. Inspur is the world's #3 server vendor overall, and the largest supplier of servers in China. The suspension comes in the wake of Inspur's addition to a list released by the U.S. government this week outlining 20 companies it says are controlled by the Chinese military (PLA), portending swift regulatory action to block those companies from obtaining critical U.S. technologies.

We pinged Intel about the report of suspended shipments to Inspur, and the company provided the following statement to Tom's Hardware:
 "We have temporarily paused shipments to one customer in order ensure compliance with U.S. Government export regulations. This is a temporary pause expected to last less than two weeks for some items, and others will resume in a matter of days. We will resume shipments as soon as we can do so while ensuring compliance with U.S. law."- Intel statement.

It's noteworthy that Intel did not name Inspur specifically, likely in keeping with its traditional practice of not speaking directly about its supply to end customers.

However, the statement was provided in response to our query about the reports of suspended Inspur shipments, so the implication is clear.

Intel says it plans to resume shipments on 'some' items within two weeks, and 'others' within a matter of days, but we've reached out to clarify if all of the impacted products will resume shipping. Most of the US government restrictions apply to critical IP that it wishes to keep out of the hands of the Chinese military, so it's unclear how quickly Intel can earn an exemption and/or license for all of its products. Intel undoubtedly has a team of lawyers formulating a plan, though.

While most of the attention has been focused on the U.S. government's restrictions on Huawei, Inspur is a much more important company in the server market.

Inspur is certainly not a household name, but according to IDC, the company ranked #3 in total global server shipments during 2019, and was, by far, the the #1 supplier of both A.I. and traditional servers in China, both of which represent key revenue generators for Intel in the world's fastest-growing market (more than 50% of Intel's revenue now comes from its data center businesses).
...

Continue Reading