Nvidia, a renowned American chip manufacturer, is preparing to commence extensive manufacturing of its H20 AI chip, specifically tailored for the Chinese market, in the second quarter of 2024.
The chip, recognized as the most robust among the trio of chips developed for China, has encountered delays in its initial release, which was originally scheduled for November 2023. These delays were due to challenges in integrating the chip into the server manufacturing processes.
According to sources familiar with the matter, initial production of the H20 chip will be limited, with priority given to large-scale customers. However, there have been indications of hesitancy among Chinese companies in adopting the scaled-down H20 chip. This has prompted an exploration of domestic alternatives amid concerns over potential tightening of restrictions in the #United States. Notably, #Baidu, a prominent Chinese search engine, has shifted its reliance from Nvidia to artificial intelligence chips developed by #Huawei Technologies, signaling a significant shift in the market.
In an effort to regain its position in the Chinese market, Nvidia is devising strategies for two additional chips, namely L20 and L2. These chips incorporate most of Nvidia's latest AI capabilities and have undergone power reduction in compliance with the latest regulations. However, Nvidia has refrained from making any sales announcements regarding these three chips.
In December 2023, Nvidia introduced a modified version of the Advanced Gaming Chip to comply with revised rules. The company is counting on these modifications to maintain its market presence in China following the tightening of rules that banned the export of AI chips from the United States.
In October 2023, the U.S. Department of Commerce imposed a series of restrictions on the sale of advanced AI chips to #China. This move aimed to close loopholes that emerged after the 2022 restrictions on exporting AI chips to China.
These restrictions halted the shipment of crucial #Nvidia AI products, including the AI A800 and H800 chips. These chips were introduced in November 2022 as substitutes for Chinese customers following the initial imposition of restrictions on exporting advanced microchips and hardware to China.
