Nvidia (NVDA) is planning to launch a new low-cost artificial intelligence (A.I.) microchip for the Chinese market.
The new chip will reportedly cost significantly less than the company’s restricted H20 microchip, with company plans to begin mass production as early as this June.
The new chip will be part of Nvidia’s latest generation “Blackwell” A.I. processors and is expected to be priced between $6,500 U.S. and $8,000 U.S.
That’s below the $10,000 U.S. to $12,000 U.S. that Nvidia’s H20 processor sells for currently.
The lower price reflects the Chinese chips weaker specifications and simpler manufacturing requirements, according to media reports.
The processor for the Chinese market will be based on Nvidia’s RTX Pro 6000D, a server-class chip, and will use conventional GDDR7 memory instead of more advanced high bandwidth memory (HBM).
Nvidia still requires U.S. government approval to sell the weaker microchip to China.
The company has been trying to find a workaround so that it can sell its products in China, where the data centre market is estimated to be worth $50 billion U.S.
Despite U.S. export restrictions, China remains a big market for Nvidia, accounting for 13% of the company’s global sales in the past year.
This is the third time that Nvidia has had to tailor a microchip for China after restrictions from U.S. authorities who are keen to limit Chinese technological development.
The stock of Nvidia has declined 5% this year to trade at $131.29 U.S. per share.
