Nvidia said to plan cheaper Blackwell AI chip for China market

Nvidia plans to introduce a new AI chip for the Chinese market, priced between US$6,500 and US$8,000.

This is significantly lower than its recently restricted H20 model, which ranges from US$10,000 to US$12,000.

The new chip, based on the Blackwell architecture, features weaker specifications and simpler manufacturing requirements.

It will utilize conventional GDDR7 memory instead of high bandwidth memory and will not use advanced packaging technology from Taiwan Semiconductor Manufacturing Co.

Mass production is expected to begin as early as June, though the final name of the product is not yet confirmed.

This development marks Nvidia’s third GPU tailored for China in response to United States export restrictions.

CEO Jensen Huang said the older Hopper architecture used in the H20 cannot be modified to meet current US regulations.

In the last financial year, China represented 13% of Nvidia’s sales, but US export curbs have significantly impacted its market share, which has declined from 95% before 2022 to 50% now.

These restrictions have forced Nvidia to write off US$5.5 billion in inventory and forgo US$15 billion in sales.

The new chip is designed to comply with US regulations, which limit memory bandwidth to approximately 1.7-1.8 terabytes per second. This is lower than the H20’s bandwidth of 4 terabytes per second, aligning with the new export limits.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ US export controls have created an unintended AI chip arms race

Export restrictions on advanced AI chips have triggered a transformation in China’s semiconductor landscape, inadvertently accelerating domestic innovation.

Nvidia CEO Jensen Huang recently acknowledged this reality, stating that US export controls have spurred Chinese development and caused Nvidia’s market share in China to drop from 95% to just 50% 1.

This pattern of restriction followed by adaptation has forced Nvidia to develop specialized variants of its chips three times now, with the Blackwell-based design representing their latest attempt to maintain access to what Huang describes as a “$50 billion data center market” 2.