China Downgrades AI Chips To Secure TSMC Production

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According to Chinese media, MetaX's C500 chip is something in between A100 and A800. It has computing power of 15 trillion floating point operations per second (Tflops) at a single-precision floating-point format (FP32), compared with A100's 19.5 Tflops.

In fact, MetaX could request the Shanghai-based Semiconductor Manufacturing International Corp (SMIC) to produce its AI chips. But SMIC has reportedly allocated most of its 7 nanometer chip production capacity to Huawei Technologies.

H20 chips

After the US tightened its chip export controls last October, Nvidia planned to unveil in November three AI chips – H20, L20 and L2 – for the Chinese markets. But the launch was delayed to 2024 as the California-based company wanted to check whether the chips would comply with the US export controls.

In March, Nvidia commenced pre-orders for its H20 chips. Alibaba reportedly ordered over 30,000 H20 chips. Last month, distributors sold H20 chips at a more than 10% discount to Huawei's Ascend 910B due to an abundant supply of the chips in the market in China.

A Hainan-based writer surnamed Tang says that a server with eight H20 chips is now priced at 1.1 to 1.3 million yuan (US$151,783 to US$179,380) while one with the same number of Ascend 910B chips costs about 1.3 to 1.5 million yuan.

Tang stresses that H20's performance only reaches about half of Ascend 910B's.

Chinese media said SMIC is now responsible for the production of Ascend 910B chips. The previous version of the chip, called Ascend 910, was made by TSMC in Taiwan.

Due to SMIC's limited production capacity of 7nm chips, China still needs to import Nvidia's AI chips, some analysts said.

Jensen Huang's speech

When Nvidia's co-founder and Chief Executive Jensen Huang was walking on the streets in Taipei on May 29 during his Taiwan trip, he was approached by a Chinese Television System (CTS) reporter. He agreed to an impromptu interview.

The so-called“godfather of AI” said“Taiwan is one of the most important countries in the world” as it is at the center of the electronics industry.

“The computer industry is built because of Taiwan, so it's a very, very important country,” he added. It showed that his description of Taiwan as a country was not a slip of the tongue.

Fortunately for him, his speech has not yet caused any big trouble in China.

On May 23-24, China launched large-scale military drills near Taiwan. It complained that Taiwanese President Lai Ching-te promoted”Taiwan independence” in his inauguration speech on May 20.