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US-China tech war
TechTech War

Chinese tech firms scramble to secure Nvidia’s AI chips before US ban cuts off supply

  • Xiamen Hongxin Electron-Tech Co said it was ‘stepping up communication with multiple Nvidia distributors’ to meet client demand
  • China’s leading server maker Inspur, a key distributor of Nvidia products in the country, said it has been ‘actively stocking up’ amid tight supply

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The logo of Nvidia is seen inside a GH200 server during the Hon Hai Technology Day in Taipei, Taiwan, October 18, 2023. Photo: EPA-EFE
Iris Dengin Shenzhen

Chinese companies are scrambling to secure Nvidia’s chips after the US further restricted the supply of key graphics processing units (GPUs), dealing a fresh blow to China’s artificial intelligence (AI) ambitions.

Xiamen Hongxin Electron-Tech Co, a publicly-listed maker of flexible printed circuit boards in Shenzhen, is “stepping up communication with multiple Nvidia distributors in the limited window period as the US government is still escalating its restrictions against computing power chips”, the company told investors on its official Q&A platform on Wednesday.

In the statement, Hongxin declined to elaborate on the progress of the communications with distributors, while admitting that it did not work directly with Nvidia.

The electronics firm, which also supplies semiconductors for AI servers through a partnership signed with Shanghai-based chip start-up Enflame Technology in April, said it would need to increase the use of domestic AI chips to meet client demand for computing power if Nvidia products are banned completely.

“The stricter the restrictions on Nvidia, the greater the space left for domestic AI chips and servers,” the company said on the investor platform.

Hongxin will lease servers and computing power for a 1 billion yuan (US$136.7 million) AI data centre project in Tianshui, the second-largest city in northwestern Gansu province, according to a company announcement earlier this month. Hongxin has ordered over 9,000 chips from Enflame for this project, the firm said on Wednesday.

China’s leading server maker Inspur, a key distributor of Nvidia products in the country, said it has been “actively stocking up” as supplies have been tight this year, but declined to elaborate on inventory levels, according to a report by Securities Times last week.

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