Nvidia’s Strategic Move: New Chip for China Amid Trade Tensions

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As the United States explores stricter trade measures to restrict advanced chip technology from being sold to China, Nvidia, a major American semiconductor company, is reportedly developing a variant of its latest artificial intelligence chips that will adhere to these regulations.

According to unnamed sources cited by Reuters, Nvidia is collaborating with the Chinese company Inspur to introduce and market the new chip, provisionally called the “B20,” in China. It is anticipated that shipments of the B20 will commence in the second quarter of 2025. Nvidia has chosen not to comment on this development.

Currently, Nvidia has produced three chips that meet U.S. export standards, including the H20, which the company has discounted to remain competitive against local competitor Huawei. Reports indicate that sales of the H20 are beginning to rise, with expectations that Nvidia will sell over one million units in China this year, generating approximately $12 billion in revenue, despite existing trade restrictions. This anticipated sales figure is nearly twice that of Huawei’s forecast for its Ascend 910B chip, as reported by the Financial Times, referencing data from SemiAnalysis.

However, analysts at Jefferies have warned that Nvidia’s H20 chips could face future risks under additional U.S. trade regulations. The annual review of U.S. semiconductor export controls is set for October, and there is a strong possibility that H20 sales to China could be prohibited. Such a ban could take various forms, including a specific product ban, a reduction in the allowed computing power, or limitations on memory capacity.

Furthermore, analysts suggest that the U.S. may also tighten export restrictions on chips sold to other countries in the region, such as Malaysia, Indonesia, and Thailand, or extend these controls to Chinese firms operating overseas, though the latter scenario might present greater challenges for implementation.

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