According to Reuters, Nvidia’s most advanced artificial intelligence chips developed for the Chinese market have had a poor start as they are priced lower than competing chips from Chinese technology giant Huawei due to sufficient supply.
The flattening of prices highlights the challenges faced by Nvidia’s China business in the face of sanctions and intensified competition on artificial intelligence chip exports in the United States, casting a shadow over the company’s future in the Chinese market, which contributed 17% of its revenue in the 2024 fiscal year.
The increasing competitive pressure in China has also sounded an alarm for investors in this American semiconductor design company. After announcing its lucrative revenue forecast on Wednesday, the company’s stock price continued its astonishing upward trend.
Nvidia, which dominates the artificial intelligence (AI) chip market, launched three chips specifically designed for the Chinese market at the end of last year, after US sanctions prevented its most advanced semiconductor exports.
Among these chips, H20 is the most highly anticipated as it is the most powerful Nvidia product sold in China, but three supply chain sources told Reuters that the chip has sufficient supply in the market, indicating weak demand.英伟达 的图像结果
Two of the three sources revealed to Reuters that in some cases, The price of H20 chips is more than 10% lower than Huawei Ascend 910B (the most powerful AI chip of Chinese companies). Due to the sensitivity of the issue, the two sources refused to disclose their names.
Analysts say that although Nvidia is striving to seize the market share it cannot lose, its prospects are becoming increasingly uncertain.
According to a report by CCID Consulting, a Chinese market research firm, China’s share in the global artificial intelligence industry is expected to exceed 30% by 2035.
IG market analyst Hebe Chen said that Nvidia is taking a subtle path, striving to find a balance between maintaining the Chinese market and dealing with the tense situation in the United States. In the long run, Nvidia is definitely preparing for the worst-case scenario.
On Wednesday, when Nvidia released its first quarter financial report, executives warned that the company’s business in China was significantly lower than in the past due to sanctions.
Chief Financial Officer Colette Kress stated that our data center revenue in China has significantly decreased compared to before the implementation of new export control restrictions in October. We expect the Chinese market to remain highly competitive in the future.

Analysts say that, The performance of H20 will become a major factor in its business in China, and its long-term prospects will depend on how it competes with local technology giant Huawei.
Huawei only started challenging Nvidia last year, and sources said that the Guangdong based company will significantly increase its Ascend 910B chip shipments this year. Sources said that the chip performs better than H20 in some key indicators.
Huawei did not immediately respond to requests for comment.
According to Reuters’ verification of existing government procurement data, in the past six months, only five countries or national affiliated buyers have expressed interest in purchasing H20 chips, while over a dozen buyers of Huawei 910B chips during the same period. These data are not detailed and may not reflect the full extent of market demand.
Due to the sanctions imposed by the United States to restrict China from becoming a technological powerhouse, Nvidia’s H800 and A800 are banned in China. The company’s other advanced product lines, including H100 and B100, have also been banned.
Another major obstacle to the success of Nvidia H20 chips in China is Beijing’s demand for companies to purchase Chinese chips, although two out of three sources have indicated a decrease in such orders in recent months.
Sources say that, H20 was widely launched in China last month and was delivered to customers in just over a month.
According to two sources, some Chinese technology giants have already placed orders, with Alibaba ordering over 30000 H20 chips. Alibaba did not immediately respond to the request for comment.
According to sources, Chinese server distributors currently sell H20 servers at a single card price of around 100000 yuan, and eight card servers at a single card price of around 1.1 million to 1.3 million yuan.
In contrast, the Huawei 910B single card sold by distributors costs over 120000 yuan, while the single card price for eight card servers ranges from 1.3 to 1.5 million yuan. Sources added that, The prices of H20 and Huawei 910B will fluctuate depending on the size of the order volume.
Dylan Patel, founder of research firm SemiAnalysis, stated that nearly 1 million H20 chips will be shipped to China in the second half of 2024, and Nvidia must compete with Huawei in terms of price.
Patel said: Due to the larger memory capacity, The production cost of H20 is higher than that of H100.
He also added that the price of H20 is only half that of H100. H100 is a powerful chip from Nvidia that will be banned from export to China in 2022.