Nvidia plans to resume exports of its H20 chips to China after a ban was imposed in April. However, analysts are predicting tough times ahead for the company amid rising competition in the Chinese market.
Resumption of H20 Chip Exports
Nvidia is set to resume the export of its H20 chips to China after receiving assurances from the Trump administration regarding compliance with new norms concerning the Chinese market.
Impact of Domestic Suppliers on the Market
Analysts from brokerage firm Bernstein point out that U.S. export controls have led to an increased reliance of Chinese companies on domestic vendors such as Huawei, Cambricon, and Hygon. They forecast that the share of local Chinese suppliers in the AI market will grow from 17% in 2023 to 55% by 2027.
Chip Security Concerns and China's Response
According to Howard Lutnick, the export of H20 chips to China poses a national security threat to the U.S., as the intended technology could be utilized by the Chinese army. The Cyberspace Administration of China expects Nvidia to provide documentation related to potential security risks associated with its H20 chips. In response, Nvidia refuted claims about the presence of tracking and control mechanisms in its technologies.
Despite the resumption of exports, Nvidia faces challenges in the Chinese market, where competition with local suppliers is intensifying and concerns about technology security are on the rise.
