Nvidia has cut the price of special GPUs it makes for the Chinese market in the face of local competition from Huawei.

The GPU giant developed new products last year for the vast, lucrative China market amid US restrictions imposed on the high performance accelerators it is allowed to export to the country.

Yet as The Register noted earlier this year, Nvidia found that some customers in China weren't so keen on its reduced spec products, and were leaning instead towards domestically manufactured kit for accelerating AI workloads.

According to Reuters, the company has now been forced to price some of its products below those of rival hardware made by Chinese technology giant Huawei, and there is claimed to be an abundant supply of Nvidia's chips in the market owing to weak demand.

Nvidia declined to comment.

The company's China-focused kit includes the H20, L20, and L2 GPUs, and it is understood that the H20 in particular is being sold at a greater than 10 percent discount in comparison with Huawei's Ascend 910B.

The Ascend 910B is claimed to have performance on a par with that of Nvidia's A100 GPU, and is believed to be an in-house design manufactured by Chinese chipmaker SMIC using a 7nm process technology, unlike the older Ascend 910 product.

The developments highlight the problems that Nvidia faces in China, which has been the source of between 20 percent and 25 percent of the company's revenue over recent years.

That figure has now fallen to about 17 percent, according to some reports, and may fall further if US restrictions continue to prevent Nvidia from competing effectively against local manufacturers.

Meanwhile, Samsung has denied reports its high bandwidth memory (HBM) intended for Nvidia's GPU products is having issues passing the necessary tests before the chips can be included.

According to Reuters, which cited anonymous sources for this information, the alleged issue was related to heat and power consumption problems with Samsung's HBM3 chips and may also affect its next-gen HBM3E products.

(For a fuller explanation of HBM, see our partner website Blocks & Files)

We asked Samsung about this, but it was not immediately available to comment. However, it told Reuters that "HBM is a customized memory product requiring optimization processes in tandem with customers' needs," and denied that there was an issue, saying that claims of units failing due to heat and power consumption were not true.

Nvidia declined to comment on this issue.

Demand for HBM components has the potential to cause a supply shortage, as The Register reported this week, which could be exacerbated if there were to be problems with the chips made by Samsung.

HBM chips are made by other suppliers, but SK hynix warned earlier this month that it has already sold everything it expects to produce this year and most of its 2025 production as well, citing high demand driven by the AI craze. ®

https://www.theregister.com//2024/05/24/nvidia_faces_local_competition/