As the U.S. contemplates implementing stricter trade limitations to curb the supply of advanced chip equipment to China, Nvidia, a prominent U.S.-based chip manufacturer, is reportedly developing a variant of its new artificial intelligence chips to adhere to these regulations.
The new chip, tentatively known as the “B20,” is intended for the Chinese market and is being created in collaboration with a local distribution partner, Inspur. According to sources, the B20 is expected to begin shipping by the second quarter of 2025.
Nvidia has also developed multiple chips that align with U.S. export controls, including the H20 model, which was recently discounted to counter reduced sales and competition from Chinese rival Huawei. Encouragingly, H20 sales have started to increase, with projections indicating Nvidia could sell over one million units in China this year, potentially generating around $12 billion in revenue despite ongoing U.S. trade restrictions.
Although sales of the H20 are on the rise, analysts from Jefferies express concerns that these chips may face new bans under the upcoming U.S. semiconductor export controls review in October. They indicate a likelihood that the H20 could be restricted from sale to China through several potential measures, such as setting specific product bans, reducing computing power limits, or capping memory capacity.
Further complicating the situation, the U.S. might also broaden its export controls to include chips sold to other nations in the region, like Malaysia, Indonesia, and Thailand, as well as extend restrictions to Chinese companies operating abroad.
This situation illustrates the ongoing dynamics at play in the global semiconductor industry, showcasing how companies like Nvidia are navigating complex regulatory environments while maintaining a focus on innovation. The demand for AI technology continues to grow, indicating that firms capable of adapting to regulatory changes can still thrive in a competitive marketplace. Despite the challenges posed by trade restrictions, Nvidia’s proactive approach to developing compliant chips could facilitate continued engagement in the Chinese market, positioning it well for future opportunities.