Production of semiconductor chip File photo: VCG

US semiconductor giant Nvidia is reportedly working on a new version of its flagship artificial intelligence (AI) chips designated for the China market, the latest effort by a foreign chipmaker to tap the great potential of the world's largest electronics consumer market despite the Biden administration's intensifying chip export restrictions to curb China's high-tech growth.

Analysts said on Tuesday that the escalating US crackdown on China's chip sector will draw a backlash against US firms but will not hinder China's technological rise. 

They said that Chinese chip producers are accelerating research and development (R&D) to reach key breakthroughs at an early date, and US chip firms' market share in China will then sharply contract.

Nvidia is working on a special version of its AI chip for the China market. Nvidia will work with Inspur, one of its major distributor partners in China, on the launch and distribution of the chip, which is tentatively named "B20," and the shipments are planned to start in the second quarter of 2025, Reuters reported.

The AI chip giant in March unveiled its flagship model B200 "Blackwell" chip series, which is due to be mass-produced later this year. Nvidia didn't reply when reached by the Global Times on Tuesday.

Nvidia's move comes amid fierce competition from Chinese tech giants like Huawei, while indicating that Washington's trade policies against China have harmed the interests of US firms rather than hindering China's technological rise, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Tuesday.

Such a cat and mouse game will likely continue, as the vast China market is indispensable for US chip companies, Xiang said. "There is no better choice for Nvidia. About a dozen Chinese tech giants are accelerating their R&D efforts, and once they develop chips competitive with those of Nvidia, the US chip giant will see its market share in China plunge," he said.

According to a report released by industry association SEMI on July 9, global sales of semiconductor manufacturing equipment by original equipment manufacturers are forecast to set a new industry record of $109 billion in 2024, with China expected to account for about 32 percent, solidifying its lead over other regions.

"The Biden administration's escalating chip export restrictions will only force US chipmakers to come up with more new products for export to China while complying with US policies, since companies are driven by market and profit," Fu Liang, a Beijing-based tech analyst, told the Global Times on Tuesday.

Thanks to China's rapid development in high-tech fields like AI, the country's demand for chips is huge. As a result, US suppliers such as Nvidia, Intel and Qualcomm are expected to reap sizable revenue from the China market, Fu said.

Faced with external pressure, Chinese chip producers are also accelerating R&D to boost the long-term healthy development of the domestic chip industry. In addition, the technological hegemony of the US is pushing countries across the world to recognize the importance of maintaining fair competition in the tech field and promote mutual development, Fu said.

Chinese Foreign Minister Wang Yi held a phone call with the Netherlands' new Foreign Minister Caspar Veldkamp on July 11, during which Veldkamp said the Dutch side does not support "decoupling" from China and is willing to maintain communication with China to develop practical China-Netherlands relations, the Xinhua News Agency reported.

Bloomberg reported recently that the US is considering imposing tougher semiconductor curbs on China, with the restrictions to affect Japan's Tokyo Electron and ASML. It said that the US plans to impose controls on foreign-made products that use even the tiniest amount of any US technology.

Chinese Foreign Ministry spokesperson Lin Jian said on July 17 that the US overstretches the concept of national security, politicizes trade and tech issues, and uses them as weapons to tighten control over chip exports to China and coerce other countries to go after China's semiconductor industry.

"We hope that relevant countries will do the right thing, firmly resist coercion, and jointly uphold a fair and open international trade order to protect their own long-term interests," Lin told a regular press conference.

Xiang said that it is a delusion among US politicians to create a global chip industrial and supply chain without China. "The globally integrated chip industry is a key link for the global high-tech sector, and its stability has a direct impact on the production and innovation of electronic products. The continuous US curbs and crackdowns on China harm the global tech advance and will backfire on itself," he said.