The U.S. government agreed to allow Nvidia’s previously restricted H20 AI chip to return to the lucrative Chinese market. TaiwanPlus spoke to Marco Mezger of Neumonda Technology Group about what this means for Taiwan's semiconductor industry.
00:00NVIDIA says that the US government has changed course and will now allow them to sell their H20 AI chip in China, more or less reversing a previous ban on those chips being exported to China.
00:13Were you surprised to hear about this reversal?
00:15Yeah, it was an interesting move.
00:17And I think, of course, initiated by Jensen Wang, the CEO of NVIDIA.
00:24Yes, I was surprised, but actually not too much.
00:30But in reality, if you look at the practicality of this solution, it makes, from my point of view, really sense to open this up, not only for NVIDIA, but for AMD also and for other Western companies, because the market is extremely big.
00:46And Jensen Wang is not a politician or a party member.
00:51He's a businessman.
00:52He has stakeholders.
00:53He has shareholders.
00:55And he needs to have a story that he is continue to thrive.
00:59Yeah, and let's just remind the audience, what exactly is the H20 chip and why is it so important to US-China AI competition?
01:08Okay, the H20 is kind of a restricted chip version of the newest NVIDIA chips.
01:15So this means they have not so much bandwidth, not so much teraflops power.
01:21And in this regard, they are not like the full high-end chips, what you see, which go to Meta, Google, Facebook, or to other companies in the Western world.
01:32They are similar to some of the China competitors.
01:38And I give you an idea about the market, what is expected in China.
01:41I think Jensen Wang just recently mentioned this also.
01:44He expects the market to be for chips, AI chips in China in 2026, around about 50 billion US dollar.
01:52And I think for them, it's also like an opportunity with their software system to have good control of the whole supply chain and keep the opportunities in China alive.
02:09And by the way, it's not only NVIDIA, also AMD is a beneficiary of this new regulation, which just came out recently.
02:17And how might this affect Taiwan's semiconductor industry?
02:22The H20 and maybe some of these AMD chips are made by TSMC, right?
02:28Yes, yes.
02:29I think TSMC is the largest supply of NVIDIA for this chip.
02:33And, you know, the whole ecosystem in Taiwan is thriving because of this, right?
02:39So TSMC revenue continuously go up.
02:42They are a big beneficial.
02:44But in reality, if you look from a perspective of revenue growth and new loan dynamics, there is another interesting segment in Taiwan, which is growing very strongly.
02:57So these are the companies like Viwin, Vistron, Compile, ASRock.
03:03So these are companies who are building these whole systems together for global data centers.
03:10So I think for Taiwan, of course, it's from a pure commercial point of view, it's a good aspect because there's more revenue, more foundry services needed in order to serve more global markets for AI.
