China's Huawei Technologies has stepped up to fill the void in AI chips now that the U.S. has effectively barred Nvidia from selling AI chips to Chinese customers. Nvidia stock fell Monday.
Huawei plans to begin mass shipments next month of an alternative to Nvidia's now-banned H20 processor, Reuters reported Monday. Huawei has already made some shipments of the new artificial intelligence chip, called the 910C, Reuters said.
The 910C achieves performance comparable to Nvidia's H100 chip by combining two 910B processors into a single package through advanced integration techniques, the report said. The H100 chip is an older Nvidia processor, released in October 2022.
Earlier this month, the Trump administration told Nvidia that it would need an export license to sell its custom H20 processor in China and other restricted countries. Nvidia is taking a write-off of up to $5.5 billion for inventory in its fiscal first quarter, indicating that it doesn't expect to be granted any licenses.
Nvidia rival Advanced Micro Devices received a similar trade ban for its MI308 products from the Trump administration. AMD expects to take a charge of up to $800 million to write off inventory and purchase commitments related to AI chip sales to China.
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On the stock market today, Nvidia stock dropped 4.5% to close at 96.91. AMD stock retreated 2.2% to close at 85.56.
Huawei plans to release its next-generation AI chip, called the Ascend 920, later this year. The Ascend 920 supposedly offers performance comparable to the Nvidia H20, Tom's Hardware reported.
China's SMIC is reportedly manufacturing the chips for Huawei.
"One question is whether SMIC has the production capabilities in place to support China's burgeoning AI demand, given the increase in advanced semiconductor processing requirements," Wedbush Securities analyst Matt Bryson said in a client note Monday.
"SMIC purportedly remains challenged to match desired yields," he said. "But if SMIC can surmount these issues and U.S. restrictions remain in place, eventually new offerings from Huawei could permanently constrict Nvidia's opportunity in China."
Year to date, Nvidia stock is down nearly 28% on concerns about trade restrictions and ongoing demand for AI processors for data centers.
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