NVIDIA to roll-out a cheaper AI chip for China
What's the story
NVIDIA is gearing up to launch a more affordable artificial intelligence (AI) chipset for the Chinese market, according to Reuters. The new graphics processing unit (GPU), which will be a part of NVIDIA's latest generation Blackwell-architecture AI processors, is tipped to be priced between $6,500 and $8,000. That will be much lower than the previously restricted H20 model which sold for between $10,000 and $12,000.
Chip specifications
New chip based on RTX Pro 6000D
The upcoming AI chipset will be based on NVIDIA's RTX Pro 6000D, a server-class graphics processor. Unlike the H20 model that used high bandwidth memory, the new GPU will use conventional GDDR7 memory. It won't include TSMC's advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology either. These design choices will make it cheaper and easier to manufacture than more advanced models.
Impact
NVIDIA's market share in China has halved
China made up 13% of NVIDIA's sales in the last financial year. However, owing to US export restrictions which started affecting its products in 2022, NVIDIA's market share in China has halved from 95% to 50%. The company's biggest competitor is Huawei which manufactures the Ascend 910B chip. If US export curbs persist, more Chinese customers could switch to purchasing Huawei chips according to NVIDIA CEO Jensen Huang.
Worry
Problems faced by the company
NVIDIA had to write off $5.5 billion in inventory because of the H20 ban and lost $15 billion in sales. The latest export restrictions have added new limits on GPU memory bandwidth, a key metric for AI workloads that require heavy data processing. Investment bank Jefferies estimates that these regulations cap memory bandwidth at 1.7-1.8TB per second against the 4TB per second the H20 can handle.