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Despite the spec downgrade, there are several indications that suggest that the new chip will be readily accepted by the Chinese market.
American multinational technology firm NVIDIA Corporation (NASDAQ: NVDA) said it has reconfigured its chip specifications in a way that is soothing for export to the Chinese market. As reported by Reuters citing the company’s announcement on Monday, since the United States Commerce Department placed its A100 chip on the restricted products list for China, it has been working hard to bypass the restrictions.
By doing so, the company said it has reconfigured the specifications of the A100 chip into the A800 chip. This new chip has been on a publicity spree amongst distributors in China, suggesting a unique readiness to embrace the new product despite its lower specs compared to the A100.
While both the A100 and the A800 chips can be used for the same products, the latter processes at a rate of 400 gigabytes per second, down from the 600 gigabytes per second for the former. The restriction placed on chips by the Commerce Department limits those with a speed rate of 600 gigabytes per second from being shipped to China in a bid to rein in the country’s military and general tech scene.
“The Nvidia A800 GPU, which went into production in Q3, is another alternative product to the Nvidia A100 GPU for customers in China. The A800 meets the US Government’s clear test for reduced export control and cannot be programmed to exceed it,” an Nvidia spokesperson said in a statement to Reuters.
Had it not made the move to reconfigure the chip to that which can meet the sanctions, NVIDIA said it would have received hundreds of millions of dollars in revenue slump. As it stands, it may still feel the weight of the sanctions in its Q3 result set to be announced on November 16.
NVIDIA A800 Chip to Meet a Ready Market
Despite the spec downgrade, there are several indications that suggest that the new chip will be readily accepted by the Chinese market. Already, it has been confirmed that the top server manufacturers in the country including Inspur Software Co Ltd (SHA: 600756) and H3C have started making use of the new A800 chip.
“The A800 looks to be a repackaged A100 GPU designed to avoid the recent Commerce Department trade restrictions,” said Wayne Lam, an analyst at CCS Insight, adding that “China is a significant market for Nvidia and it makes ample business sense to reconfigure your product to avoid trade restrictions.”
The United States and China have been in a very toxic trade dispute that has continued to impact major tech companies, especially in the latter country. Amongst the most impacted firms is Huawei Technologies Co Ltd, whose phone production slumped when American and allied companies were restricted from doing business with the firm.
With the new A800 now on sale to the target market, NVIDIA hopes to rake in as much as $400 million this quarter.