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Investing.com-- Nvidia (NASDAQ:NVDA) plans to launch a new artificial intelligence chip in China at a lower price than its recently restricted H20 chip, with production planned to begin by as early as June, Reuters reported over the weekend.
The GPU, or graphics processing unit, will be part of Nvidia’s current generation Blackwell line of processors, and will be priced between $6,500 and $8,000, lower than the $10,000 to $12,000 Nvidia charged for the H20, Reuters reported, citing two sources familiar with the matter.
The proposed chip will have weaker specifications and simpler manufacturing requirements, and will use conventional GDDR7 memory instead of the high bandwidth memory (HBM) used by more advanced AI chips. This is in line with new U.S. restrictions on chip exports to China, which prevent sales of chips with HBM.
The new China chip will not use Nvidia supplier TSMC’s advanced chip-on-wafer-on-substrate packaging technology, Reuters reported.
The push for a new China chip comes as Nvidia struggles against new U.S. export restrictions to remain competitive in the Chinese market. CEO Jensen Huang recently said China remained a valuable market for Nvidia, and could balloon to a $50 billion sales market in the coming years.
Nvidia was recently blocked from selling the H20 chip- a lower-spec AI chip it had developed specifically for Chinese markets under Biden-era controls on chip exports to China.
But the Donald Trump administration recently introduced tighter controls on tech exports to China, essentially restricting the sale of any AI chips with advanced HMB tech in the country.
Nvidia has been steadily losing market share in China since 2022, with Huang stating that it had fallen to 50% from 95% before 2022. Huang had recently also called the U.S. export controls on China a "failure," noting that the controls had only pushed local chipmakers to increase their efforts to develop alternatives to U.S. exports.
Nvidia faces stiff competition from China’s Huawei, which has made steady advancements in its AI chip development capabilities in recent years with its Ascend line.