Concerns Over Nvidia H20 Chip Shortages by China’s H3C
H3C warns of potential Nvidia H20 chip shortages, which could hinder China’s AI ambitions amid rising demand. The company cites geopolitical tensions and supply chain uncertainties, with priority distribution based on profitability. Major firms in China have increased orders, further straining supply.
H3C, a prominent server manufacturer in China, has expressed concerns regarding potential shortages of Nvidia’s H20 chip, which is currently the most advanced AI processor available in China due to U.S. export restrictions. According to a client notice, the anticipated supply crunch may hinder China’s progression in artificial intelligence, particularly as its technology firms are intensifying investments in AI development.
The company highlighted that the H20’s international supply chain is fraught with significant uncertainties, and their current inventory is nearly depleted. Geopolitical factors disrupting global trade and material supplies have contributed to this instability, with new shipments expected by mid-April.
The demand for H20 chips has surged recently as organizations rapidly adopt cost-effective AI models developed by DeepSeek, a Chinese AI startup that has gained prominence since January. Major companies like Tencent, Alibaba, and ByteDance have notably increased their orders of the H20 chip in response to the heightened interest.
Furthermore, H3C reported that their supply plans beyond April 20 encounter challenges linked to alterations in raw material policies, disruptions in shipping, and production difficulties. The company plans to allocate incoming H20 chips based on a profit-first principle, giving priority to stable, long-term clientele who place higher-margin orders.
The scarcity of H20 processors in the Chinese market is corroborated by an anonymous industry source, who noted that they encountered difficulties acquiring the chips due to pre-orders being fulfilled at higher prices. U.S. officials reportedly are contemplating further restrictions on H20 chip sales to China. As a key original equipment manufacturer for Nvidia in China, H3C collaborates with other companies such as Inspur, Lenovo, and xFusion to distribute these chips.
In conclusion, H3C’s alert regarding the potential shortages of Nvidia’s H20 chip underscores the challenges imposed by geopolitical tensions and supply chain issues. The increasing demand from major technology firms in China for these advanced AI processors adds to the urgency of the situation. As uncertainties in supply continue, priority distribution may limit access for less profitable customers, potentially impacting the growth of AI in the region.
Original Source: news.az
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