As the United States contemplates stricter trade measures to curb the export of advanced chip technology to China, Nvidia, a U.S.-based chip manufacturer, is reportedly developing a version of its new artificial intelligence chips that will adhere to these regulations.
According to sources familiar with the situation, Nvidia is collaborating with a local distribution partner, Inspur, to introduce and market the new “B20” chip in China. It is anticipated that the B20 will begin shipping in the second quarter of 2025. Nvidia has not commented on these developments.
The company currently has three chip models designed to align with U.S. export restrictions, including the H20, which Nvidia has recently discounted due to lackluster sales, aiming to compete with chips from local competitor Huawei. However, sales for the H20 are reportedly increasing, with projections suggesting that Nvidia could sell over one million H20 chips in China this year, valued at approximately $12 billion, in spite of ongoing U.S. trade restrictions. This expected figure is nearly double Huawei’s sales forecast for its Ascend 910B chip.
Analysts from Jefferies have raised concerns about the potential risks to Nvidia’s H20 chips under impending U.S. trade regulations. With the annual review of semiconductor export controls approaching in October, analysts suggest it is highly probable that the H20 may be prohibited from being sold to China. This ban could be implemented in various ways, such as a specific product ban, a reduction in the computing power threshold, or a limitation on memory capacity.
Furthermore, there is the possibility that the U.S. could expand export controls on chips sent to other nations in the region, including Malaysia, Indonesia, and Thailand, or broaden the restrictions to encompass overseas companies based in China. However, achieving this could prove more challenging, according to the analysts.