Nvidia is caught in a dilemma regarding China, prohibited from shipping its most capable products, but it turns out that the Chinese may not want to buy the products it is allowed to sell.
GPU giants are said to be preparing new products to comply with the latest tough restrictions imposed by the Biden administration on tech exports to China late last year, but they may decide this is a pointless effort. unknown.
According to reports, Nvidia is solidifying its plans to begin mass production of the H20 GPU in the second quarter of 2024. The chip is said to be the highest-performance model of his three GPUs designed for the Chinese market, and was first unveiled next November. Official release of Washington’s latest export regulations.
Rather than focusing on interconnect bandwidth, these updated rules implement a new set of limits on performance density across various products. This previously allowed Nvidia to continue selling the product by reducing performance in this area.
The company also started shipping its GeForce RTX 4090 GPU to the Chinese market again late last year in the form of the RTX 4090D. This reduced performance by approximately 11%. register It was reported at the time.
But NVIDIA may be facing a bigger problem than just a temporary loss of revenue. According to the Wall Street Journal, Chinese customers are less enthusiastic about the company’s crippled products and are turning to rival domestic silicon to accelerate AI processing.
Middle Kingdom cloud operators such as Alibaba and Tencent have reportedly told NVIDIA that they plan to significantly reduce their purchases of GPU products this year after the hardware they were interested in was banned. .
Instead, the companies are looking to alternatives that are closer to home because the performance difference between chips from Chinese tech giant Huawei and others and Nvidia’s downgraded chips is small, the Journal reported, citing sources familiar with the matter. He reported that he was looking into it.
The conflict between the U.S. and China over technology has been a nightmare for some of America’s largest semiconductor companies, as most of their profits come from sales to China. For Nvidia, this is believed to represent 20-25% of data center revenue.
Additionally, the Chinese government’s reaction to being blocked from purchasing advanced U.S. technology is simply to ramp up its development programs to accelerate the performance of its own chips, resulting in the very things that U.S. government restrictions block. It was widely predicted by many that it would produce the desired results.
U.S. semiconductor companies are sufficiently concerned that in the middle of last year, the chief executives of both Intel and Qualcomm visited Washington to discuss the impact export restrictions were having on their businesses, but no updates have been made. It clearly failed to prevent further regulation.
Nvidia may also find its efforts to circumvent export controls futile. U.S. Commerce Secretary Gina Raimondo said at a briefing late last year that the U.S. must continue to tighten regulations to prevent China from finding ways to circumvent them.
“If we redesign the chip around certain cut lines that allow it to run AI, the next day I’m going to be controlling it,” she reportedly said at the time. “We can’t let China get these chips. Of course.” ®