Trends
Nvidia set to make $12B from AI chip sales in China
Nvidia is forecasted to dispatch over one million H20 accelerator chips to China this year, priced at $12,000-$13,000 each, potentially accruing $12 billion in revenue.
Headline
Nvidia is forecasted to dispatch over one million H20 accelerator chips to China this year, priced at $12,000-$13,000 each, potentially accruing $12 billion in revenue.
Context
OUR TAKE Nvidia’s CEO, Jensen Huang, confirmed a notable downturn in China’s business, citing increased competition and tech restrictions. Despite this, Nvidia is steadfast in serving its Chinese clientele. CFO Colette Kress reported a significant Q4 drop in data center revenue, post-October’s export controls, underscoring regulatory impacts on China operations. –Vicky Wu, BTW reporter From market analysis firm SemiAnalysis, NVIDIA is forecasted to dispatch over one million H20 accelerator chips to China this year, priced at $12,000-$13,000 each, potentially accruing $12 billion in revenue. Amongst three GPUs customised for China, the H20, despite performance limitations and AI capabilities under 15% of the H100, remains the most powerful.
Evidence
Pending intelligence enrichment.
Analysis
Initially met with indifference due to cost and performance, renewed interest from major Chinese tech firms like Baidu, Alibaba, Tencent, and ByteDance has emerged, triggered by supply shortages of Huawei’s Ascend 910B. Analysts observe that despite a performance dip, the H20 enjoys popularity due to its high-capacity HBM memory, advantageous in practical AI applications. If predictions hold true, Nvidia’s revenue in China will surpass the previous year’s $10.3 billion, albeit with a market share closer to 10%, down from 25% pre-October 2022 export restrictions. CFO Colette Kress noted a sharp drop in China’s data centre revenue post-restrictions, while CEO Jensen Huang pledged continued service to the Chinese market despite technological limitations. Also read: Nvidia set to face French antitrust charges Also read: How Nvidia dominates the AI chip market
Key Points
- Nvidia is forecasted to dispatch over one million H20 accelerator chips to China this year, priced at $12,000-$13,000 each, potentially accruing $12 billion in revenue.
- Initially met with indifference due to cost and performance, renewed interest from major Chinese tech firms like Baidu, Alibaba, Tencent, and ByteDance has emerged, triggered by supply shortages of Huawei’s Ascend 910B.
Actions
Pending intelligence enrichment.
