Nvidia To Test Chinese Markets With Slower Chips

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Baidu, China's search engine, had already ordered 1,600 Ascend 910B chips from Huawei for about 450 million yuan (US$61.83 million) in August and received about 1,000 of them, Reuters reported on November 7, citing two unnamed sources.

One of the sources said the Ascend processors are now the most sophisticated AI chips available in China, although they are not as fast as Nvidia's.

“The H20's overall computing power is only equivalent to 20% of that of the H100, meaning that there is room for price cut,” a Shanghai-based columnist writes in an article published on Monday.“However, using the H20 will still be more costly than using China's AI chips, such as Huawei's 910B.”

The writer says Nvidia will lose its competitiveness in China over the long run if it cannot sell its most cutting-edge products in the country.

New parameters

In August last year, the Biden administration ordered US chipmakers to stop exporting graphic processors that operate at interconnect bandwidths of 600 gigabytes per second or above to China and Russia. Nvidia's A100 and H100 chips and AMD's MI250 chip are in the category affected by this rule.

Nvidia later unveiled the A800 and H800 processors, which work at 400 and 300 gigabytes per second respectively, targeting the Chinese markets. Some analysts found that the A800 and H800 were actually reduced versions of the A100 and H100, respectively.

On October 17, the US Commerce Department's Bureau of Industry and Security (BIS) said it will not categorize restricted chips by using“interconnect bandwidth” as a parameter. Instead, it will use“performance” and“performance density” as new parameters.

Under the new rules, a chip with a total processing performance of 4,800 or more or a performance density of 5.92 or more will be banned from being shipped to China. A800, H800, L40, L40S and RTX 4090 chips are in the category of this rule.

China's orders involving US$5 billion worth of Nvidia chips have reportedly been canceled.

As of now, the H20, L20 and L2 can still be exported to China as they fulfill the performance and performance-density requirements. But they are becoming unattractive to Chinese firms.

A Beijing-based writer surnamed Huang in an article describes the H20, L20 and L2 as the“castrated versions” of the more advanced H100, AD102 and AD104 chips, respectively.