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Nvidia Provides China With A New Cutting-Edge Chip That Complies With U.S. Export Laws

Nvidia Provides China With A New Cutting-Edge Chip That Complies With U.S. Export Laws
American chip manufacturer Nvidia Corp. is now selling an advanced chip in China that complies with new export regulations intended to prevent China from obtaining cutting-edge technology, according to a statement from the chip maker. 
In response to Reuters' claims that Chinese computer vendors are promoting products with the new chip, Nvidia issued a statement.
The A800 chip is the first publicly known attempt by a U.S. semiconductor company to develop cutting-edge processors for China that adhere to new U.S. trade regulations. According to Nvidia, the export restrictions could result in a loss of revenue of hundreds of millions of dollars.
In an effort to hinder China's semiconductor industry and, in turn, the United States, U.S. regulations set in early October effectively banned export of advanced microchips and equipment to produce advanced chips by Chinese chipmakers.
Nvidia and Advanced Micro Devices Inc AMD.O both announced in late August that the U.S. Commerce Department had added their advanced chips, including Nvidia's data center chip A100, to the export control list. Both the Nvidia A800 and the Nvidia A100 are GPUs, or graphics processing units.
Such sophisticated chips can be very expensive.
"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 U.S. Government’s clear test for reduced export control and cannot be programmed to exceed it," a Nvidia spokesperson said in a statement to Reuters.
There were no comments from Nvidia on whether it consulted the Commerce Department about the new chip. There were also no comments available from the US Commerce Department.
The A800 chip is available in products from major server manufacturers on at least two Chinese websites. The A100 chip had previously been used in advertising for one of those products.
The A800's specifications were described in detail on a distributor website in China. The new chip's chip-to-chip data transfer rate is 400 gigabytes per second, down from the A100's 600 gigabytes per second, according to a comparison of chip capabilities with the A100. The updated regulations limit speeds of 600 gigabytes per second and higher.
“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, basing his comments on the specs shared by Reuters, and noting that eight is a lucky number in China.
"China is a significant market for Nvidia and it makes ample business sense to reconfigure your product to avoid trade restrictions,” said Lam.
According to Lam, the A800's chip-to-chip communications capabilities clearly represent a performance downgrade for a data center that employs thousands of chips.
Inspur and H3C, two significant Chinese server manufacturers that sell servers with the new chips, did not respond to requests for comment. Both OmniSky, a chip distributor, and the A800 specifications were published online.
According to Nvidia, the restrictions on high-end chips may have an impact on its third fiscal quarter, which ended in October, by $400 million in chip sales to China. Having a replacement chip might make the financial hit less severe. On November 16, the business will release its quarterly results.

Christopher J. Mitchell

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