According to two knowledgeable sources, O has informed its Chinese customers that the release of a new artificial intelligence device, designed to comply with U.S. trade regulations, will be delayed until the first quarter of the upcoming year.
The postponed chip, named H20, stands out as the most powerful among three chips tailored for the Chinese market by Nvidia to conform with recent U.S. export constraints. This delay may present challenges for Nvidia in upholding its market share in China, particularly against local rivals like Huawei (HWT). UL.
A recent chip industry publication by SemiAnalysis, initially scheduling the debut of the new products on November 16, now indicates a rescheduled launch of the H20 in the first quarter of the following year, potentially in February or March.
The sources, opting for anonymity due to the sensitive nature of the details, pointed out that the delay in releasing the H20 was due to difficulties encountered by client manufacturers in integrating the microprocessor.
Nvidia has been actively preparing the L20 and L2 alongside the H20 to comply with the latest U.S. import regulations. While the L20 is anticipated to progress without delays, information regarding the status of the L2 remains undisclosed.
In the wake of stricter trade regulations imposed by Washington, restricting Nvidia from exporting products like the advanced A800 and H800 AI chips, the company is relying on these new chips to maintain its foothold in the Chinese market.
About two weeks after the U.S. imposed a second round of bans on exporting sophisticated microchips and equipment to China, Nvidia introduced the A800 and H800 as alternatives for Chinese consumers in November 2022.
An analysis by SemiAnalysis on the chip specifications revealed that the computing power of the H20, L20, and L2 has been slightly reduced to comply with the new U.S. regulations. Nevertheless, these chips encompass most of Nvidia’s latest AI capabilities.
The export restrictions have opened up opportunities for competitors like Huawei to secure orders that were previously dominated by Nvidia, well-known for its GPUs leading the AI market.
Baidu (9888), a prominent Chinese internet company, reportedly made significant efforts to acquire Huawei’s AI chips, according to Reuters sources. This strategic move was initiated before the U.S. restrictions were announced, indicating Baidu’s proactive stance in anticipation of potential limitations in sourcing from Nvidia.
Contributions to the report were made by Brenda Goh in Shanghai, Yelin Mo in Beijing, and Fanny Potkin in Singapore, with editing by Jamie Freed.
