Nvidia is reportedly planning to launch a cheaper Blackwell AI chip specifically made for China amid the US export restrictions, sources close to the developments have revealed.
According to sources cited in a Reuters report, Nvidia is expected to start mass production of the new AI chip in June, which will be sold at a significantly lower price compared to the restricted H20 model.
Nvidia’s price for the new chip reflects its weaker specs
According to the two sources cited, the restricted H20 was priced at between $10,000 and $12,000. But Nvidia has set the price for the new Blackwell processor at between $6,500 and $8,000. The price is reportedly a reflection of the weaker specifications for the latest generation Blackwell, as well as the simpler production processes.
The sources added that the new chip, tailored for the Chinese market, will be based on Nvidia’s RTX Pro 6000D, a server-class graphics processor. It will also use conventional GDR7 memory as opposed to the more advanced high bandwidth memory, according to the report.
While the three sources that Reuters cited refused to be named as they were not authorized to comment on the matter, they revealed that the new chip will not use Taiwan Semiconductor Manufacturing Co’s (2330.TW) advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology.
Although TSMC refused to comment, a Nvidia spokesperson indicated that the company was still weighing its “limited” options.
“Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market.”
Nvidia Spokesperson.
This comes as China has been a huge market for Nvidia, contributing 13% of the company’s total sales during the past financial year.
The latest development marks the third time that the American chip-making firm has had to specially make a GPU for China following restrictions imposed by US authorities. The H20 restrictions forced Nivida to write off $5.5 billion in inventory and according to CEO Jensen Huang, the company also had to let go of $15 billion in sales.
Nvidia revealed it has lost a significant market share in China
The US imposed bans on the H20 in April forcing Nvidia to consider making a lower version of the Chip specifically for China, but the plan failed to work, according to sources. Last week, Huang also revealed that Nvidia’s old Hopper architecture, which the H20 uses could not take any further modifications under current export restrictions.
In a note published on Tuesday by Chinese brokerage firm GF Securities, the new GPU would likely be called B40 or 6000D, although the firm did not indicate the price or sources of the information.
However, the two sources Reuters cited revealed that Nvidia is making another Blackwell-architecture chip for the Asian giant. According to Reuters, Huang told reporters in Taipei this week that the company’s market share in China fell from 95% before 2022, when export curbs started, to about 50% currently.
He also cautioned that continuing with US export curbs could push more Chinese customers to turn to Huawei chips, which is Nvidia’s main competitor producing the Ascend 910B chip. He added that US firms could lose billions in dollars as a result of the export embargoes.
Some semiconductor analysts have also said that the US export restrictions are making way for Chinese firms. Since the export bans were imposed, Huawei has stood as a leader in China’s AI race to compete with Nvidia, analysts have indicated.
According to a recent report from independent semiconductor research firm SemiAnalysis, although Huawei remains “a generation behind chips,” the tech firm is making waves with the hardware that uses them.
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