Chinese giants ordered more than $ 12 billion in Nvidia H20 AI chips before sanctions

Chinese technology giants Alibaba, Tencent and Bytedance made billions of dollars on NVIDIA GPUS H20 requests before US chips restrictions. These are the same chips restricted by the US government and which led to a loss of $ 55 billion to Nvidia.

The information is from Nikkei, which reports that Chinese companies already expected the restriction last year and prepared in advance. According to the data, the total amount of Chinese requests made to NVIDIA exceeded $ 12 billion, with billions in chips sent to China before restrictions interrupted the supply in April.

Evident that, for Nvidia, The damage is greater than the $ 12 billion because it still needs to deal with the storage logistics of chips that could not send.

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Turbulence and inventory

Reports of turmoil in the H20 supply chain began to emerge in late March, when a Chinese server company would have warned customers about GPUS scarcity. The scarcity should spend April 20 and, according to Nikkei, may have resulted from large requests from Chinese technology giants.

Companies like Bytedance, Tencent and Alibaba would have sought to beware of potential American sanctions on chips. This way, The three Chinese companies ordered one million GPUS H20 before US sanctions have effect.

Added to the fact that the Chinese giant of technology Huawei believes it is able to produce at least 750,000 of its GPUs Ascend A10C for AI, the country would have been able to stock a large amount of chips before US sanctions were in effect.

However, although Chinese companies have made orders from one million chips, It is unclear whether all requests have been fulfilled and what is the stock level.

Practical effects

Some sources add that the Trump government’s H20 export license requirements failed Huawei’s plan, Tencent and Bytedance of stocking GPUS for AI for a year.

Per hour, as Chinese companies cannot directly buy advanced AI GPUS, They will try to do so by creating global subsidiaries to order the chips. And TSMC has already confirmed that it is working with the US Department of Commerce to track requests that may originate from suspicious Chinese entities.

Excessive requests for H20 GPUS have increased the stock of advanced chips that Chinese companies have acquired and something they still have. Although, It all suggests that, although it is more than the US would like, it is less than the companies wanted.

Earlier this year, it was reported that Chinese Huawei had been able to get chips to manufacture up to 1 million ASI 910C GPUS, as long as there was a impeccable assembly process. The company purchased these chips before the Trump government’s first sanctions in September 2020.

However, The company’s manufacturing process is significantly behind the process used by TSMCwhich depends on advanced tools for manufacturing chips with extreme ultraviolet (EUV) radiation. Which means that even with high stock, China should be harmed by restrictions on H20 chips.

Source: Nikkei.