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Nvidia Lowers AI Chip Prices in China Amid Huawei Competition

Nvidia has reduced prices for its AI chips in China due to oversupply, resulting in them being priced lower than similar chips from Huawei, according to sources. This development highlights Nvidia’s struggles in China amid U.S. sanctions and growing competition, affecting a market that contributed 17% to its revenue in fiscal 2024.

Last year, Nvidia introduced three chips for China after U.S. sanctions restricted the export of its most advanced semiconductors. Among these, the H20 chip is the most powerful Nvidia product available in China. However, supply chain sources report an oversupply and weak demand for the H20 chip.

This has led to the H20 chips being sold at more than a 10% discount compared to Huawei’s Ascend 910B. Additionally, government procurement data over the past six months shows that only five state or state-affiliated buyers have expressed interest in the H20, while more than a dozen have shown interest in Huawei’s 910B.

Analysts note that while Nvidia is making significant efforts to maintain its market share in China, the future remains uncertain. The increasing competition in China also serves as a caution for investors in the U.S. semiconductor company, especially as Nvidia’s shares have been rising following an impressive revenue forecast earlier this week.

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