Nvidia's most advanced AI chip it developed for the China market has got off to a weak start amid fierce competition.
The growing competitive pressure in China also adds a cautionary note to investors in the US semiconductor designer as its shares extended a stunning rally following Wednesday’s bumper revenue forecast. Among those chips, the H20 is the most closely watched as it’s the most powerful Nvidia product sold in China, but the three supply chain sources said there is an abundant supply of the chip in the market, signalling weak demand.chips being sold in some cases at an over 10% discount to Huawei’s Ascend 910B — the most powerful AI chip from a Chinese company — two of the three sources said, declining to be identified due to the sensitivity of the issue.
During Nvidia’s first-quarter earnings on Wednesday, senior executives warned that the company’s business in China is “substantially” lower than in the past due to the sanctions.“Our data centre revenue in China is down significantly from the level prior to the imposition of the new export control restrictions in October,” said CFO Colette Kress. “We expect the market in China to remain very competitive going forward.
Another major stumbling block to the success of Nvidia’s H20 chip in China has been a directive by Beijing for companies to buy Chinese chips, although two of the three sources said those orders had eased in recent months.