Investing.com -- Nvidia (NASDAQ:NVDA) is aiming to begin mass production of an artificial intelligence chip specifically designed for the Chinese market in the second quarter of 2024, according to Reuters.
Citing two people familiar with the matter, the news agency said that U.S.-based Nvidia's H20 chip will be made to comply with new U.S. regulations on exports of high-tech equipment to China.
The starting volume of the shipments will be limited and catered primarily to orders from major customers, Reuters said. Nvidia declined to comment, Reuters added.
In November, Nvidia reportedly told its customers in China that it was delaying the launch of the H20. It had originally planned to roll out the H20 and other fresh China-focused AI chips as early as Nov. 16, according to industry newsletter SemiAnalysis.
Nvidia previously flagged that sales in its key Chinese market would "decline significantly" in its fiscal fourth quarter quarter due to a move by the Biden administration last year to extend the scope of its sanctions on exports to the country.
Approximately 20%-25% of Nvidia's crucial data center business is derived from its sales in China, the company said, meaning that it could be vulnerable to Washington's ongoing drive to limit Beijing's access to AI materials.
However, Chief Financial Officer Colette Kress said in a statement that this drop "will be more than offset by strong growth in other regions." Kress also noted that Nvidia was "working with some customers in China [...] to pursue licenses from the U.S. government."