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Nvidia (NVDA, Financials) is preparing to launch a lower-cost AI chip for the Chinese market, with mass production expected as early as June, according to a Reuters report citing unnamed sources. The new Blackwell-architecture GPU will be priced between $6,500 and $8,000significantly cheaper than the recently banned H20 model, which sold for $10,000 to $12,000.
The upcoming chip will use conventional GDDR7 memory and omit advanced packaging from Taiwan Semiconductor Manufacturing Co., allowing it to comply with tightened U.S. export restrictions that limit GPU memory bandwidth. The updated design aims to deliver around 1.7 terabytes per second of bandwidth, just under the regulatory cap.
China accounted for 13% of Nvidia's revenue last fiscal year, but its local market share has dropped from 95% in 2022 to roughly 50% after U.S. sanctions. Nvidia's CEO Jensen Huang said further restrictions could drive more customers to Chinese rivals like Huawei, which produces the Ascend 910B chip.
Despite reduced performance compared to the H20, Nvidia's software stack and CUDA platform may help preserve its edge. A second Blackwell-based chip for China is also in development and could enter production by September.
This article first appeared on GuruFocus.