July 05, 2024 – Despite a significant reduction in performance, NVIDIA’s specially supplied H20 chip for the Chinese market is estimated to generate sales exceeding $12 billion this year.
According to predictions from the chip industry consulting company, SemiAnalysis, NVIDIA is expected to deliver over one million H20 chips in the current fiscal year, with an estimated price range of 12,000to13,000 per chip.
In the previous fiscal year, NVIDIA’s revenue in China was $10.3 billion. This means that the sales of H20 chips alone are expected to surpass this figure this year.
The H20 chip is a customized product from NVIDIA specifically for the Chinese market. Although its AI computing power is less than 15% of the H100, major Chinese technology giants such as Baidu, Alibaba, Tencent, and ByteDance have had to purchase large quantities of H20 chips due to the insufficient supply of domestic AI chips.
Dylan Patel, the founder of SemiAnalysis, pointed out that despite the higher manufacturing cost of the H20 due to factors such as increased memory capacity, its selling price is approximately half that of the H100. This represents a compromise made by NVIDIA in terms of profit margins.
Furthermore, the H20 chip still possesses certain advantages in practical use, especially with the support of its memory capacity and NVIDIA’s ecosystem.
Jensen Huang, the CEO of NVIDIA, has stated that despite facing technical and competitive limitations in the Chinese market, NVIDIA will make every effort to provide services to customers in this market.
