Nvidia's other advanced product lines, including the H800, A800, H100, and B100, are banned in China due to U.S. sanctions. The company's future in China depends on how it competes with Huawei, which only began to challenge Nvidia last year. Huawei is expected to significantly increase its shipments of the Ascend 910B chip this year, which reportedly outperforms the H20 in some key metrics. Despite these challenges, some of China's tech giants, including Alibaba, have already placed orders for the H20 chip.
Key takeaways:
- Nvidia's advanced AI chip, the H20, developed for the China market is facing weak demand, with abundant supply forcing it to be priced below Huawei's Ascend 910B chip.
- The weak performance of the H20 chip in China is a result of U.S. sanctions on AI chip exports and increased competition, casting a cloud over Nvidia's future in a market that contributed 17% to its revenue for fiscal 2024.
- Despite Nvidia's efforts to capture share in the Chinese market, the outlook is increasingly uncertain, with China's global share of the AI industry projected to exceed 30% in 2035.
- Another major challenge for Nvidia's H20 chip in China is a directive by Beijing for companies to buy Chinese chips, although these orders have eased in recent months.