In order to get around new export restrictions from the U.S., leading chipmaker Nvidia is offering an alternative to its Chinese customers.
Key Details
- American software company Nvidia is now offering a graphics-processing chip that meets U.S. regulations to Chinese customers.
- The chip, known as the A800, can be used in a variety of artificial-intelligence (A.I.) technologies and servers.
- The A800 replaces the A100, a product now restricted by U.S. exporting regulations.
- Nvidia’s new chip has similar capabilities to the A100, but a smaller capacity to send and receive data from other chips. This ability is important in AI training.
Why it’s news
The new regulations announced last month are an attempt to slow Chinese development of AI and other technologies as well as increase national security.
Semiconductor chips, particularly advanced ones used in A.I. and supercomputers, are now restricted from being shipped to China.
The new regulations particularly affected Nvidia as a major Chinese chip supplier. Nvidia announced in August that the new regulations would cost the company around $400 million in lost sales. Around a quarter of its overall revenue came from sales in China and Hong Kong.
Now that an alternative has been developed, Nvidia is preparing for an influx of demand from its Chinese customers. The company plans to start shipping out the new product in the next few weeks.
Some U.S. companies are also expected to buy the new chip. Dell Technologies, for example, sells many products to China and needs the chips for its products.
While the A800 chip performs many of the same functions of the A100, it doesn’t do everything as smoothly. The A100 is able to process 600 gigabytes of data per second while the A800 is limited to 400 gigabytes. This change will have the largest effect on supercomputers.
Backing up a bit
Policies from the Biden administration have encouraged chip manufacturers to do business in the U.S. rather than China. Following the chip shortage during the pandemic, U.S. officials grew concerned about national security as it related to semiconductor chips.
Semiconductor chips are found in nearly every piece of modern technology, from everyday microwaves to military equipment. Without control of this supply chain, the U.S. could face disaster if the supply were to be cut off.
Policies from the Biden administration including the CHIPS & Science Act and others encourage chip production in the U.S., restrict exports of certain chips used in artificial intelligence, and restrict the sale of semiconductor equipment to Chinese companies.
These new policies cause global chip stocks to fall immediately after the announcement.
China responded to President Joe Biden’s announcement of these restrictions, saying that the move will hurt the global economy and affect supply chains.
Restricting sales of semiconductor equipment to Chinese companies will likely affect Chinese manufacturing. Most semiconductor equipment is controlled by the U.S. and allies. Without support from these industries, China will struggle to continue its manufacturing, Bloomberg reports.
