As the U.S. evaluates stricter trade restrictions to prevent advanced chip technology from reaching China, Nvidia, a prominent U.S.-based chipmaker, is reportedly developing a modified version of its new artificial intelligence chips to comply with these regulations.
Nvidia is said to be collaborating with a local partner, Inspur, to introduce and distribute a chip tentatively named the “B20” in the Chinese market, according to a report by Reuters that cites sources familiar with the situation. The B20 is anticipated to begin shipping in the second quarter of 2025. Nvidia has chosen not to comment on these developments.
The company has already produced three chips that meet U.S. export control requirements, including the H20, which had its prices reduced due to sluggish sales as it competes with homegrown rival Huawei. However, sources indicate that sales for the H20 are now increasing, with projections suggesting Nvidia will sell over one million H20 chips in China this year, generating approximately $12 billion in revenue, despite existing U.S. trade restrictions. This sales forecast nearly doubles Huawei’s expected sales for its Ascend 910B chip, based on data from SemiAnalysis.
In light of potential changes in U.S. trade rules, Jefferies analysts warned that Nvidia’s H20 chips could be vulnerable. They predict that during the annual review of semiconductor export controls in October, it is “highly likely” that the H20 will be prohibited for sale to China. This ban could take various forms, such as a product-specific ban, a reduction in computing power limits, or restrictions on memory capacity.
Additionally, the U.S. government might extend export controls on chips sold to neighboring countries, including Malaysia, Indonesia, and Thailand, or even to overseas Chinese firms, although the latter option may prove more challenging to implement, per analysts’ assessments.