"Don't buy NVIDIA chips" China bans purchase by domestic companies

All-out effort to reduce dependence on the U.S.

To Alibaba, ByteDance, etc.

Blocks purchase of 'China-only' low-end chips

Determination to secure an AI chip supply chain

Chinese authorities are reported to have completely banned domestic companies from purchasing NVIDIA's latest China-only artificial intelligence (AI) chips. Analysts say this reflects a determination to make the domestic chip supply chain self-reliant.

On the 17th, according to the UK Financial Times (FT), the Cyberspace Administration of China (CAC) notified major domestic companies such as ByteDance and Alibaba to immediately halt orders and testing of the RTX 6000D, a low-end inference chip designed by NVIDIA for the Chinese market. In China, tens of thousands of RTX 6000D orders had recently been discussed and were under validation, but such work was completely halted following the authorities' instruction.

This measure represents a further strengthened sanction against NVIDIA. Last month, Chinese authorities had restricted domestic companies from purchasing another NVIDIA China-only chip, the H20, and strongly opposed its use in matters related to national security. Observers said this clearly signals China's intent to reduce dependence on NVIDIA and make its chip supply chain self-reliant. A Chinese big-tech executive said, "There used to be expectations that NVIDIA chip supplies would resume if geopolitical tensions eased," adding, "Now the message is clear that all companies must devote themselves to building indigenous systems."

The RTX 6000D's performance falls short of market expectations. According to Reuters, the chip underperformed the RTX 5090 in sample tests, and although it was based on the latest Blackwell architecture, it used conventional GDDR memory instead of high-bandwidth memory (HBM). As a result, Chinese companies' interest has remained focused on the high-performance H20, which is said to support both training and inference.

NVIDIA has been hit by multiple negative developments out of China. On the 15th, China's State Administration for Market Regulation (SAMR) announced preliminary investigation results that NVIDIA violated China's anti-monopoly law. The probe examined whether NVIDIA fulfilled promises made to the Chinese government when it acquired Israeli semiconductor firm Mellanox in 2019. At that time, NVIDIA pledged to reliably supply GPU accelerators to the Chinese market for six years, but it halted supply of some products citing U.S. semiconductor export controls on China. Chinese authorities judged this a breach of conditions and launched an antitrust investigation in December last year; the preliminary probe results stated that violations were confirmed. Under the law, NVIDIA's fines could reach around 2 trillion won.

The Chinese government had earlier raised concerns about backdoors in NVIDIA chips. It summoned NVIDIA officials to explain the security risks of the H20 chip and to submit related materials.

Reporter Lee Hye-in hey@hankyung.com