Turning the red handkerchief, twisting the yangko, dragging the suitcase and handing out red envelopes... NVIDIA CEO Huang Renxun took off his classic leather jacket and flashed into China in the "Northeast Flower Vest" clothing limited to the Chinese New Year.
Recently, Huang Renxun quietly visited Nvidia's offices in Beijing, Shanghai, and Shenzhen, and appeared at the company's annual meeting. His last visit to China was in December 2019, when Nvidia held the GTC (GPU Technology Conference) conference in Suzhou.
It is understood that Huang Renxun's trip did not involve meetings with government officials, and the main purpose was to send New Year greetings to employees in Chinese Mainland.
However, with years of deep cultivation in the GPU and AI fields, Nvidia firmly holds the iron throne of AI infrastructure. However, facing the "chip ban" in the United States and Nvidia's "Chinese special edition" chip being cold, it is difficult for Huang Renxun's appearance not to evoke associations such as "Old Huang is here to appease domestic customers".
Can the Nvidia AI chip of the "China Special Edition" still be produced in 2024? Can and how can the domestic AI chip industry stand out? "Considering that Nvidia's products that can enter the mainland market in compliance have lost their competitiveness compared to domestic chips, there are indeed many large customers who are considering domestic chips, mainly Huawei's Ascend 910B. Qin Xin (pseudonym), a R&D personnel of an AI chip company in China, told China Business News reporters," Developing domestic supply chains, especially domestic OEM to make up for TSMC's gap, will be the focus of the development of domestic AI computing chips in 2024. "
The Chinese market that cannot be ignored
With the widespread dissemination of the video and photo of Huang Renxun wearing the Northeast Flower Vest, on January 21, 2024, Nvidia confirmed that Huang Renxun attended Nvidia's annual meetings in Beijing, Shanghai, and Shenzhen on January 15, 17, and 19, respectively.
However, NVIDIA revealed that Huang Renxun's visit to China this time was mainly for the purpose of gathering with employees, and there were no other itineraries. The reporter noticed that the last time Huang Renxun came to China was half a year ago, Huang Renxun planned to visit Shanghai on June 6, 2023 and meet with senior executives of Chinese enterprises such as Tencent, ByteDance, Ideal Auto, BYD and Xiaomi.
Compared to the low-key tone this time, the news spread widely at that time. But soon news spread that Huang Renxun was "not coming" again, and his itinerary was forced to be cancelled due to some factors. Huang Renxun returned to the United States after finishing his trip to the Taipei International Computer Show in China.
The last time Huang Renxun publicly visited China, he had to go back more than four years. On December 18, 2019, NVIDIA held a GTC conference on the banks of Jinji Lake in Suzhou. Huang Renxun gave a keynote speech for about two hours, sharing NVIDIA's plans and innovations in various fields such as computer graphics, AI, and high-performance computing.
2023 can be said to be Nvidia's "Dream Year". Within a year, Nvidia's stock price skyrocketed by 234%, with a market value exceeding trillions of dollars. Its annual revenue is expected to reach a record high of 58.8 billion dollars, surpassing Intel and Samsung Electronics to become the world's top semiconductor company. This year, Huang Renxun made a judgment at the "2023 GTC" conference that "the time for AI's iPhone is coming".
In the entire chip market, especially in the AI chip market, the Chinese market cannot be ignored. According to a report by The Wall Street Journal, Nvidia has a market share of over 90% in the $7 billion Chinese AI chip market.
Huang Renxun also stated in a media interview at the end of 2023 that the Chinese market accounts for approximately 20% of Nvidia's sales. It is reported that Nvidia China currently has a total of nearly 3000 employees.
What does Nvidia mainly do in its three offices in Beijing, Shanghai, and Shenzhen? What are the features? The reporter contacted Nvidia China, but as of the time of publication, no response has been received. However, Zhao Dianfeng, former sales director of Altera China, said that Nvidia's three offices in China should be similar to other chip companies in the United States. "These offices have sales and on-site engineers who provide technical support, with similar functions.".
It is worth noting that in the continuously booming field of new energy vehicles, Nvidia has also firmly grasped the market of autonomous driving chips. The automotive business is Nvidia's fourth largest sector independent of data centers, gaming, and professional visualization, and is also seen as the company's new growth engine. Currently, over 80% of the autonomous driving chips in the Chinese market come from NVIDIA.
In other words, even if Nvidia's "China Special Edition" AI chips are not well received by Chinese customers, it can still obtain tickets to supply autonomous driving chips to Chinese new energy vehicle companies.
Domestic supply chain welcomes opportunities
In 2022, the US government issued a series of AI chip export restrictions targeting the Chinese market, which resulted in Nvidia being unable to provide A100 and H100 chips to the Chinese market; In October 2023, the United States once again updated new regulations on semiconductor export controls, and Nvidia's already downgraded A800 and H800 chips were within the scope of control.
There are policies at the top and countermeasures at the bottom. Nvidia quickly adjusted the H100 and launched customized chips HGXH20, L20PCIe, and L2PCIe that comply with US regulations for the Chinese market. According to a research report by semiconductor research firm Semianalyze sis, H20 used for AI model training provides 96GB of memory, 4TB/s memory bandwidth, and 296tera FLOPS FP8 performance. In theory, its overall computing power is about 80% lower than Nvidia H100.
However, Chinese buyers seem to be not buying the "special edition" H20 series chips. According to the Wall Street Journal, since November 2023, several leading technology companies such as Alibaba, Tencent and ByteDance have been testing the chip samples provided by Nvidia. They have indicated to Nvidia that the number of chips ordered from Nvidia in 2024 will be far less than the previously planned Nvidia high-performance chips, which are now banned.
On this matter, the reporter sought confirmation from Alibaba, Tencent, ByteDance and other companies, and the other side said that they would not comment. Qin Xin stated that Nvidia's products that are now able to enter the mainland market in compliance have lost their competitive advantage over domestic chips in terms of performance. This is a fact that "there are indeed many large customers who are considering domestic chips, mainly the Huawei Ascend 910B.".
It is reported that Shengteng 910B is an AI processor designed by HiSilicon, a subsidiary of Huawei. Shengteng series chips were released in 2019, including two models, Shengteng 910 and Shengteng 310. Shengteng 910 is mainly used for cloud AI applications, and Shengteng 310 is mainly used for edge computing and other low-power scenarios. The Shengteng series chips are manufactured using TSMC's 7-nanometer process and are paired with Huawei's self-developed AI computing framework MindSpore.
According to Jiang Tao, Vice President of iFlytek, the capabilities of the Ascent 910B can basically benchmark against Nvidia's latest A100 chip. As the United States further upgrades its restrictions on the export of AI chips to China, the demand for Huawei's Ascend 910B has skyrocketed, and buyers are even willing to purchase at a premium. The large-scale intelligent computing cluster infrastructure based on the Ascend 910B has started testing in multiple intelligent computing centers and telecom operators in China.
Some American analysts believe that although Chinese companies may purchase Nvidia chips funded by Nvidia in the short term, Nvidia's China business is likely to become a victim of the US "chip ban" after the transition period of domestic chip substitution is completed. Meanwhile, research firm TrendForce Consulting also believes that Nvidia's AI chip market share in Chinese cloud computing enterprises may decline to 50% in the next five years.
"In 2024, it is difficult to estimate the overall market share of domestic AI chips because there is currently a lack of authoritative statistical caliber in the market." Qin Xin said that for the domestic AI chip market in 2024, "it is foreseeable that the sanctions imposed by the United States will further strengthen, and soon domestic AI chip manufacturers will face the dilemma of being unable to use non mainland supply chains. Therefore, developing domestic supply chains, especially domestic OEM to make up for TSMC's gap, will be the focus of the development of domestic AI computing chips in 2024.".
"For domestic AI chip companies, the core and key is to achieve migration to the domestic supply chain. During this process, there will also be many difficulties, including a lack of necessary support such as IP and tool chain, as well as production capacity and yield issues of domestic foundries." Qin Xin said.