Sanctions cut Nvidia’s accelerator supply volumes in China by half

In its annual report late last month, Nvidia already noted that China and Hong Kong’s share of the company’s total revenue had fallen from 17% to 13% year-on-year, but that revenue had still grown by 66%. This week, the company’s CFO said that the number of Nvidia accelerators shipped to China had been cut in half due to U.S. sanctions.

These comments were made by Colette Kress at the Morgan Stanley technology conference. According to her, Nvidia’s accelerator shipment volumes will remain at about the same level in the current quarter. Designed with the U.S. export restrictions of the previous year in mind, the H20 accelerators provide a level of performance that allows Nvidia to compete with Chinese developers. If it drops even lower, Nvidia’s product shipments to China will lose their special meaning due to the growing competition with Chinese market players, according to Colette Kress. Compared to Blackwell, however, the H20 demonstrates about 25 times lower performance.

As an Nvidia representative summed up, “H20 will be supplied as long as demand demands and as long as it complies with current export control requirements.” Recall that in January, the Biden administration managed to introduce new restrictions on the supply of computing accelerators outside the United States with a more serious geographic gradation and a strengthened supply licensing system. Since these requirements will not come into force until May of this year, and Donald Trump is currently in power in the United States, Nvidia’s management does not consider it reasonable to make any predictions about the further impact of sanctions on its business.