Chinese companies are manufacturing chips nearly identical [soylentnews.org] to AMD's Epyc server CPUs, using two joint ventures with AMD. This move comes after the US blacklisted certain Chinese supercomputing centers [soylentnews.org] in 2015 in an attempt to prevent them from using Intel Xeon chips, and more recently, Chinese telecom equipment maker ZTE was banned from buying components from US companies [soylentnews.org]. China's Sunway TaihuLight supercomputer (formerly #1 [top500.org] on the TOP500 list) also uses domestically designed Sunway SW26010 manycore chips [wikipedia.org].
China isn't eager to embrace another American chipmaker like AMD. In response, AMD established two joint ventures with Chinese holding company THATIC -- one with Chengdu Haiguang Microelectronics Technology (CHMT), and another with Haiguang IC Design, also known as Hygon.
AMD owns a majority stake in CHMT, which ensures that its IP isn't transferred to THATIC. THATIC owns a majority stake in Hygon, which licenses AMD's IP from CHMT. Hygon designs the chips, and CHMT produces the chips through a suitable foundry and then sends them back to Hygon for packaging, marketing, and sales.
This arrangement seemingly placates American and Chinese regulators -- AMD's IP isn't being passed to a Chinese company, and a Chinese chipmaker gains access to superior data center CPU designs. AMD generates less revenues through these JVs than it would through direct sales, but it still gains a foothold in China's massive data center market. But more importantly, this move could wound Intel.
Good luck maintaining control of your "IP". As for the pain?
Many big companies, including Microsoft and Baidu, started installing AMD's cheaper chips in their data centers. In a meeting with Nomura Instinet analyst Romit Shah in June, then-CEO Brian Krzanich admitted that AMD was gaining ground, and Intel was trying to prevent it from gaining a "15% to 20%" share of the data center market. That admission was stunning, since Intel traditionally controlled more than 99% of the data center market with its Xeon chips. Intel's data center group grew its revenues by 11% to $19.1 billion last year, and accounted for 30% of its top line. Epyc was already a thorn in Intel's side, but AMD's sponsorship of Chinese clones could throttle its sales in mainland China, which accounted for 24% of its sales last year. Its total sales in the region only rose 6% in 2017, compared to 20% growth in 2016.