Nvidia provides a new cutting-edge semiconductor for China that complies with US export regulations

China PC vendors are now advertising products with a new chip.

Oakland, California: The company confirmed Monday that US chip maker Nvidia Corp is introducing a new high-end chip in China that meets current export control rules aimed at keeping cutting-edge technology out of China’s reach.

Nvidia responded to a Reuters report that Chinese PC vendors advertise their products with the new chip.

The chip, called the A800, represents the first reported effort by a US semiconductor company to create advanced processors for China that follow new US trade rules. Nvidia said the export restrictions could cost it hundreds of millions of dollars in revenue.

US regulations in early October effectively banned the export of microchips and advanced equipment for producing advanced chips by Chinese chip makers, as part of an effort to disrupt China’s semiconductor industry, and thus by the military.

In late August, Nvidia and Advanced Micro Devices Inc. AMD.O said their advanced chips, including Nvidia’s A100 data centre chip, have been added to an export control list by the US Department of Commerce. The Nvidia A800 can be used in place of the A100 and both are GPUs or GPUs.

These advanced chips can cost thousands of dollars each.

“The Nvidia A800 GPU, which entered production in the third quarter, is another Nvidia A100 GPU replacement product for customers in China. The A800 meets clear US government testing,” the spokesperson said in a statement to Reuters.

Nvidia declined to comment on whether it had consulted the Commerce Department about the new chip. A Commerce Department spokesman declined to comment.

At least two Chinese websites of major server manufacturers offer the A800 chip in their products. One of these products previously used the A100 chip in promotional materials.

The China distributor website details the specifications of the A800. A comparison of the chip’s capabilities with the A100 shows chip-to-chip data transfer rate of 400Gbps on the new chip, down from 600Gbps on the A100. The new rules limit rates to 600 Gbps and above.

“The A800 appears to be a repackaged A100 GPU designed to get around recent trade restrictions imposed by the Commerce Department,” said Wayne Lamm, an analyst at CCS Insight, citing his comments on specifications published by Reuters, and noting that eight is a lucky number.

“China is an important market for Nvidia and it makes a lot of sense to reconfigure its products to avoid trade restrictions,” Lam said.

Lam said the chip-to-chip capabilities of the A800 represent a clear drop in data centre performance as thousands of chips are used together.

Major Chinese server makers Inspur and H3C, which are providing servers with the new chips, did not respond to requests for comment. Nor did chip dealer OmniSky, who posted the A800’s specifications online.

Nvidia said about $400 million in chip sales to China could be affected in the fiscal third quarter that ended in October due to restrictions on high-quality chips. Getting a replacement chip can help reduce the financial damage. The company will announce quarterly results on November 16.

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