[News] NVIDIA Reportedly Facing Price Cut Pressure of H20 Chip in China Amid Competition with Huawei

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In response to US export bans, NVIDIA, the global leader in AI chips, has commenced to sell H20, its AI chip tailored for the Chinese market earlier this year. However, an oversupply caused the chip to be priced lower than its rival, Huawei, in some cases even at an over 10% discount, according to the latest report by Reuters.

The US Department of Commerce restricted the export of NVIDIA AI chips to China due to concerns about their potential military use in late 2022. In response, NVIDIA has repeatedly reduced product performance to comply with US regulations. The H20 chip, derived from the H800, is specifically designed as a ‘special edition’ for the Chinese market.

However, due to the abundant supply in the market, citing sources familiar with the matter, Reuters noted that H20 chips are being sold at a discount of over 10% compared to Huawei’s Ascend 910B, the most powerful AI chip from the Chinese tech giant.

The chip is reportedly to be sold at approximately 100,000 yuan per unit, while Huawei 910B sold at over 120,000 yuan per unit.

The decreasing prices underscore the difficulties NVIDIA encounters in its China operations amid U.S. sanctions on AI chip exports and rising competition from local rivals.

According to a previous report by The Information, major tech companies such as Alibaba, Baidu, ByteDance, and Tencent have been instructed to reduce their spending on foreign-made chips like NVIDIA’s, according to sources cited by the media outlet.

(Photo credit: Huawei)