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NVIDIA plans new AI chips for Chinese market amid US rule changes

Written by Mon 13 Nov 2023

NVIDIA plans to launch artificial intelligence (AI) chips designed for the Chinese market. The news has followed US export restrictions that limited the sale of high-end AI chips to China earlier this month.

According to the chip industry newsletter SemiAnalysis, the NVIDIA chips are called H20 SXM, L20 PCIe, and L2 PCIe.

The H20 SXM chip is named as ‘HGX H20’ by Reuters and CNBC, creating uncertainty regarding the accurate naming conventions of NVIDIA’s chip.

The chips are based on NVIDIA’s H100, which was hit by the US chip restrictions alongside the A100 in 2022.

“NVIDIA is perfectly straddling the line on peak performance and performance density with these new chips to get them through the new US regulations,” said SemiAnalysis.

The chipmaker is anticipated to unveil the new chips as early as 16 November, with prompt delivery to Chinese manufacturers following the announcement.

Designed specifically for China, the HGX H20 is more than 20% faster than the H100 in LLM (Large Language Model) inference. This is due to its shared similarities to NVIDIA’s newly-announced H200.

SemiAnalysis said NVIDIA already has product samples for these GPUs and they will go into mass production within the next month. Shares of NVIDIA experienced a 3.3% increase during midday trading, following the report.

Managing Director at WestSummit Capital Management, Bo Du, said NVIDIA’s HGX H20 computing power is approximately 50% of the A100.

US Restrictions Impact NVIDIA Chip Dominance

The news arrived less than a month after US officials accelerated the tightening of export restrictions. These restrictions are aimed at preventing countries like China, Iran, and Russia from acquiring advanced AI chips. 

The restrictions prohibited the sale of chips above a threshold of compute performance of connectivity. This included those designed by NVIDIA. 

NVIDIA created the A800 and H800 AI chips for the Chinese market in 2022. This was done to comply with previous US export rules by operating slightly below the established limit.

The new curbs implemented in October impacted these chips, as well as the NVIDIA A100, H100, and L40S offerings. 

NVIDIA has gained more than 90% share of China’s £5.7 billion ($7 billion) AI chip market. The US restrictions have the potential to create opportunities for Chinese chip firms to make gains against NVIDIA.

In August, Chinese tech company Baidu ordered 1,600 Huawei 910B Ascend AI chips, intended for 200 servers. By October, sources indicated that Huawei had already delivered over 60% of the orders.

The Chinese Government revealed that China imported 47.6 billion chip units in September 2022. This was a significant decrease from the 54.3 billion imported during the same period in 2021. This signified a significant drop for China, the world’s largest chip importer.

Image Credit: Reuters

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Written by Mon 13 Nov 2023

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