The U.S. is contemplating stricter trade regulations to inhibit advanced chip technology from being delivered to China. In response, Nvidia, a U.S.-based chip manufacturer, is reportedly developing a variant of its new artificial intelligence chips to meet these impending regulations.
According to sources familiar with the matter, Nvidia is collaborating with a local partner, Inspur, to launch its new chip in China, tentatively named the “B20.” It is anticipated that the B20 will begin shipping by the second quarter of 2025.
Nvidia has already introduced three chips that align with U.S. export restrictions, including the H20, which the company has recently reduced prices for due to soft sales in an effort to compete with domestic rival Huawei. However, there has been an uptick in H20 sales, with projections indicating that Nvidia could sell over one million H20 chips in China this year, amounting to roughly $12 billion, despite ongoing U.S. trade limitations. This anticipated figure is nearly double what Huawei expects to sell of its Ascend 910B chip.
However, analysts from Jeffries have cautioned that Nvidia’s H20 chips could face increased scrutiny from new U.S. trade regulations. Following the annual review of semiconductor export controls in October, there is a significant possibility that sales of the H20 chip to China will be prohibited. Potential avenues for such a ban could include specific product restrictions, reductions in computing power thresholds, or limitations on memory capacity.
In addition, analysts suggest that the U.S. may broaden its export controls on chips destined for other countries in the region, including Malaysia, Indonesia, and Thailand, or even expand these controls to overseas Chinese firms, though this latter approach would be more challenging to execute.