Exclusive: Nvidia provides China with a new cutting-edge processor that complies with U.S. export laws

OAKLAND, Calif., Nov 7 (Reuters) - U.S. chip maker Nvidia Corp (NVDA.O) is offering a new advanced chip in China that meets recent export control rules aimed at keeping cutting-edge technology out of China's hands, the company confirmed on Monday.

Nvidia responded to Reuters' reporting that Chinese computer sellers are advertising products with the new chip.

The chip, called the A800, represents the first reported effort by a U.S. semiconductor company to create advanced processors for China that follow new U.S. trade rules. Nvidia has said the export limitations could cost it hundreds of millions of dollars in revenue.

In an effort to cripple China's semiconductor sector and, in turn, the military, the United States implemented laws in early October that virtually forbade the export of sophisticated microchips and the machinery used to build advanced chips by Chinese chipmakers.

Nvidia and Advanced Micro Devices Inc AMD.O both announced in late August that the U.S. Commerce Department had placed their advanced processors, including Nvidia's data center chip A100, on the export control list. Both the Nvidia A800 and the Nvidia A100 are GPUs, or graphics processing units.

Such sophisticated chips can be quite expensive.

"For clients in China, the Nvidia A800 GPU, which began manufacturing in Q3, is another alternative product to the Nvidia A100 GPU. The A800 passes the government's crystal-clear standard for export control relaxation and cannot be programmed to do so "A representative for Nvidia told Reuters in a statement.

Over if the Commerce Department was consulted regarding the new processor, Nvidia declined to comment. A spokeswoman for the Department of Commerce declined to comment.

The A800 chip is available in products from major server manufacturers on at least two Chinese websites. The A100 chip has already been featured in advertising for one of those goods.

The A800's specs were described in full on a distributor website in China. The new processor's chip-to-chip data transmission rate is 400 gigabytes per second, down from the A100's 600 gigabytes per second, according to a comparison of chip capabilities with the A100. The updated regulations limit speeds of 600 gigabytes per second and higher.

Based on the specifications provided to Reuters, Wayne Lam, an analyst at CCS Insight, stated that "the A800 seems to be a repackaged A100 GPU meant to evade the latest Commerce Department trade restrictions." Eight is considered a fortunate number in China.

Nvidia has a sizable market in China, so reconfiguring your product to get around trade regulations makes good commercial sense, according to Lam.

According to Lam, the A800's chip-to-chip communications capabilities clearly reflect a performance decrease for a data center that employs thousands of chips.

Inspur and H3C, two significant Chinese server manufacturers who sell servers using the new processors, did not reply to requests for comment. Both OmniSky, a chip reseller, and the A800 specifications were published online.

According to Nvidia, the restrictions on high-end processors may have an impact on its third fiscal quarter, which ended in October, by $400 million on chip shipments to China. Having a new chip could make the financial hit less severe. On November 16, the business will release its quarterly results.

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