(CTN News) – To comply with US export regulations, NVIDIA (NVDA.O) intends to begin mass production of an artificial intelligence (AI) chip designed for China in the second quarter of 2024.
In October, Nvidia announced the H20 chip as the most powerful of three chips aimed at the Chinese market.
Reuters reported at the time that the delay was due to issues server manufacturers were having integrating the chip into their systems. It was originally scheduled for launch in November, but was delayed due to issues server manufacturers were experiencing in integrating the chip into their systems.
According to one of the sources, the initial production volume will be limited, with Nvidia focusing primarily on the fulfillment of large orders.
In order to protect the confidentiality of the information, both individuals declined to be identified. A spokesperson for Nvidia declined to comment on the matter.
According to Reuters, Chinese companies are reluctant to buy the downgraded H20 and are testing domestic alternatives out of concern that the US could tighten restrictions again. According to Reuters, search engine leader Baidu (9888.HK) ordered AI chips from Huawei Technologies (HWT.UL) in order to shift away from Nvidia.
In addition to the H20, Nvidia plans to develop two other chips that are compliant with the new restrictions – the L20 and the L2. The chipmaker has not yet announced which of the three will be sold.
As part of the new rules, it launched a modified version of an advanced gaming chip in late December.
After tightening export restrictions in the United States barred from shipping products including its advanced A800 and H800 AI chips, Nvidia is counting on the chips to help maintain its market share in the country.
A800 and H800 were introduced to Chinese customers in November 2022, approximately a month after the US restricted exports of advanced microchips and equipment to China for the first time.
During Semi Analysis’ analysis of the chips’ specifications, it was found that the H20, L20 and L2 all featured most of Nvidia’s latest AI features, but with reduced computing power to meet the new regulations.