Nvidia to mass produce cheaper AI chips for China starting June amid US export limits

Facing a halved market share in China due to US export restrictions, Nvidia is launching a new AI chip priced $6,500-$8,000 to comply with US bandwidth rules and regain its foothold. This move highlights the ongoing tech rivalry and strategic adaptations amid tightening US controls.

Sources:
Digital Watch ObservatoryTradingview
Updated 2h ago
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Sources: TradingviewDigital Watch Observatory
Nvidia is set to mass produce a new, lower-cost AI chip for the Chinese market starting in June, responding to US export restrictions that have limited the sale of its higher-end models. The new chip, priced between $6,500 and $8,000, is designed to comply with US bandwidth limits of 1.7 terabytes per second and represents Nvidia's third attempt to create China-compliant chips.

This move comes amid escalating US export controls aimed at curbing China's technological and military advancements, which have been condemned by China as "bullying" and protectionism. Nvidia's CEO Jensen Huang criticized the controls as a "failure," noting they have only strengthened China's resolve to develop its own chip sector.

"Our market share in China has dropped from 95% before 2022 to 50% currently," Huang revealed, highlighting the impact of US restrictions on Nvidia's dominance in the region.

The new chip will be cheaper than Nvidia's recently restricted H20 model, which sold for between $10,000 and $12,000, due to its lower specifications and simpler manufacturing requirements. China remains a significant market for Nvidia, accounting for 13% of its sales in the past financial year.

This development underscores the ongoing strategic rivalry between the US and China in AI technology, with export controls intensifying the competition. Nvidia's adaptation reflects both the challenges and opportunities in navigating these geopolitical tensions while maintaining a foothold in the lucrative Chinese market.
Sources: Tradingview
Nvidia will mass produce a cheaper AI chip for China starting June, adapting to US export limits that restrict its higher-end models. The new chip, priced between $6,500 and $8,000, aims to regain market share amid US-China tech tensions and export controls targeting advanced AI semiconductors.
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The Headline

Nvidia launches China-specific AI chip amid market share drop

The US export controls are a failure, as they have only strengthened China’s resolve and support for its chip sector.
Jensen Huang
CEO of Nvidia
Key Facts
  • Nvidia's market share in China has dropped sharply from 95% before 2022 to 50% currently due to US export restrictions.Tradingview
  • Nvidia is launching a new lower-cost AI chip for China with mass production starting in June, priced between $6,500 and $8,000.Tradingview
  • The new Nvidia chip for China is designed to meet US bandwidth limits of 1.7 terabytes per second and represents the company’s third attempt at China-compliant AI chips.Tradingview
Key Stats at a Glance
Nvidia's market share in China before 2022
95%
Tradingview
Nvidia's current market share in China
50%
Tradingview
Price range of new Nvidia AI chip for China
$6,500 to $8,000
Tradingview
Price range of Nvidia's restricted H20 model
$10,000 to $12,000
Tradingview
US bandwidth limit for AI chips
1.7 terabytes per second
Tradingview
China's share of Nvidia's sales in past financial year
13%
Tradingview
Section 2 background
Background Context

US export controls target China’s AI chip progress

Key Facts
  • The US imposed export controls on advanced AI chips starting in 2022 to limit China’s technological and military progress.Digital Watch Observatory
  • US guidelines warn that using Chinese-made semiconductors, especially Huawei’s Ascend chips, could violate US export laws with penalties including fines and imprisonment.Digital Watch Observatory
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