Nvidia Plans More Affordable AI Chip for China Amid U.S. Trade Curbs

Published 9 hours agoNVDA

Nvidia Plans More Affordable AI Chip for China Amid U.S. Trade Curbs

Nvidia is gearing up to introduce a cost-effective AI chip tailored for the Chinese market as a direct response to the recent U.S. export restrictions. As Reuters reported, the GPU, derived from Nvidia's Blackwell architecture, is expected to retail between $6,500 and $8,000. This is a significant markdown from the $10,000–$12,000 price range of the more advanced H20 model. The new model will have reduced capabilities and will employ simpler manufacturing techniques, including the use of GDDR7 memory over high-bandwidth alternatives and the exclusion of advanced CoWoS packaging from TSMC.

The new chip is reportedly set for a June 2025 launch in China. These design changes are strategically made to align with U.S. export laws by constraining the chip's memory bandwidth within the 1.7–1.8 terabytes per second limit. The shift comes in the wake of Nvidia's declining market share in China, which has dropped from 95% to 50%, ceding ground to competitors like Huawei, which is making headway with its Ascend 910B chip.

Nvidia's CEO, Jensen Huang, has candidly addressed the challenges posed by these export curbs, outlining a grim financial impact on the company's operations in China. Huang indicated a massive $5.5 billion inventory write-off and potential lost sales amounting to $15 billion, underscoring the significant hit to Nvidia's business due to these regulations.

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