Chinese fabless artificial intelligence chip makers have downgraded their designs to retain access to production in Taiwan after the United States tightened its chip export controls last October.
MetaX and Enflame, two Shanghai-based graphic processing unit (GPU) designers, submitted downgraded designs of their chips to Taiwan Semiconductor Manufacturing Co (TSMC) in late 2023 to meet the US chip export requirement, Reuters reported on Wednesday.
MetaX has developed a GPU called the C280 for TSMC production after its most advanced C500 chips ran out of stock earlier this year, according to the report. TSMC told Reuters that it works with clients to make sure it is in compliance with jurisdictions relevant to its operations.
However, it is questionable whether TSMC had ever started the mass production of C500 chips for MetaX.
Public information gathered by Asia Times showed that MetaX finished the basic testing of the C500 chips on June 13 last year and planned to begin the mass production at the end of the same year. Such a plan could have been disrupted by the US curbs.
On October 17 last year, the US Commerce Department’s Bureau of Industry and Security (BIS) unveiled a set of new rules stating that a chip with a total processing performance of 4,800 or more or a performance density of 5.92 or more will be banned from being shipped to China.
The new rules blocked the shipment of Nvidia’s A800 and H800 chips to China. It is said that A800’s performance has reached 70% of that of A100. In October 2022, the BIS banned A100’s shipment to China.
According to Chinese media, MetaX’s C500 chip is something in between A100 and A800. It has computing power of 15 trillion floating point operations per second (Tflops) at a single-precision floating-point format (FP32), compared with A100’s 19.5 Tflops.
In fact, MetaX could request the Shanghai-based Semiconductor Manufacturing International Corp (SMIC) to produce its AI chips. But SMIC has reportedly allocated most of its 7 nanometer chip production capacity to Huawei Technologies.
H20 chips
After the US tightened its chip export controls last October, Nvidia planned to unveil in November three AI chips – H20, L20 and L2 – for the Chinese markets. But the launch was delayed to 2024 as the California-based company wanted to check whether the chips would comply with the US export controls.
In March, Nvidia commenced pre-orders for its H20 chips. Alibaba reportedly ordered over 30,000 H20 chips. Last month, distributors sold H20 chips at a more than 10% discount to Huawei’s Ascend 910B due to an abundant supply of the chips in the market in China.
A Hainan-based writer surnamed Tang says that a server with eight H20 chips is now priced at 1.1 to 1.3 million yuan (US$151,783 to US$179,380) while one with the same number of Ascend 910B chips costs about 1.3 to 1.5 million yuan.
Tang stresses that H20’s performance only reaches about half of Ascend 910B’s.
Chinese media said SMIC is now responsible for the production of Ascend 910B chips. The previous version of the chip, called Ascend 910, was made by TSMC in Taiwan.
Due to SMIC’s limited production capacity of 7nm chips, China still needs to import Nvidia’s AI chips, some analysts said.
Jensen Huang’s speech
When Nvidia’s co-founder and Chief Executive Jensen Huang was walking on the streets in Taipei on May 29 during his Taiwan trip, he was approached by a Chinese Television System (CTS) reporter. He agreed to an impromptu interview.
The so-called “godfather of AI” said “Taiwan is one of the most important countries in the world” as it is at the center of the electronics industry.
“The computer industry is built because of Taiwan, so it’s a very, very important country,” he added. It showed that his description of Taiwan as a country was not a slip of the tongue.
Fortunately for him, his speech has not yet caused any big trouble in China.
On May 23-24, China launched large-scale military drills near Taiwan. It complained that Taiwanese President Lai Ching-te promoted ”Taiwan independence” in his inauguration speech on May 20.
“Huang’s political stance seems to be very similar to that of Lai,” Chen Fei, an associate professor at the School of Politics and International Studies, Central China Normal University, says in an article on Wednesday. “But he, as a businessman, will definitely put commercial benefits on top of his agenda.”
Chen said Huang only wanted to say something to please the Taiwanese contract manufacturers during his Taiwan trip, in order to ensure stable chip production. He said that although US chip export controls had hurt Nvidia’s China revenue, the company will continue to treat China as an important market.
A Jiangxi-based columnist using the pen name “Spring Music Dream” says in an article that Huang has a strong political sense and would not have delivered any controversial speeches about Taiwan issues.
The writer says some media wanted to use Huang’s fame to push their political agenda. Kuomintang, a Beijing-friendly political party in Taiwan, in October 2022 complained that the CTS newsroom was controlled by a pro-Democratic Progress Party editorial team.
Read: Huawei plans to make 3nm chips, but when?
Follow Jeff Pao on Twitter at @jeffpao3