Nvidia (NVDA) has announced plans to produce a new artificial intelligence (A.I.) microchip exclusively for the Chinese market.
Production of the new chip is scheduled to begin in this year’s second quarter, according to the Silicon Valley-based company.
The new chip is designed to comply with U.S. export rules related to China and is expected to be less powerful than the chips and semiconductors the company makes for the American marketplace.
Called the “H20,” the new chip is the most powerful of three China-focused microchips Nvidia has developed to meet new U.S. export rules that were introduced last autumn.
Initial production of the H20 chip is expected to be limited, with Nvidia saying it plans to focus on fulfilling orders of its major customers first.
Previous media reports have claimed that Chinese companies are reluctant to buy the weaker H20 microchips and are pursuing domestic alternatives.
Beyond the H20, Nvidia is developing two other microchips that comply with American export controls, the “L20” and “L2.”
Nvidia is hoping that the new chips will help to preserve its dominant market share in China, where it gets nearly a quarter of its annual revenue.
The H20, L20 and L2 chips include most of Nvidia’s newest features for A.I. work but with reduced computing power to comply with the new U.S. rules.
Nvidia’s stock has risen 215% over the last 12 months to trade at $490.97 U.S. per share.
