NVIDIA requests TSMC speed up AI GPU production to avoid China sanctions

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Company fears political decisions will end lucrative deals it has with Chinese clients. New export restrictions on AI chips could cost company $400 million in potential sales to China. If NVIDIA is unable to close deals, it could post well-low-than-expected sales in the fiscal fourth quarter.

NVIDIA exerts pressure on TSMC to complete its AI GPU purchases prior to the implementation of a fresh wave of US trade sanctions against China. According to the information, the corporation is concerned that political actions jeopardize lucrative contracts with Chinese clients. NVIDIA receives the most requests for high-performance versions based on the Ampere A100 and Hopper H100 architectures. While TSMC would supply orders for the first architecture by March 2023, those based on Hopper would not arrive until September of the following year.

If NVIDIA is fails to close these deals, its fourth-quarter sales could be significantly lower than anticipated. At the beginning of September, the US government decided to put additional export limits on domestically manufactured AI chips, which might cost the manufacturer $400 million in potential sales to Chinese clients. According to our knowledge, NVIDIA would be willing to pay a hefty fee to enter the priority line at TSMC. The Taiwanese corporation can cut the time required to complete customer orders by up to 50 percent if the consumers are ready to pay the associated charges. Therefore, instead of waiting five to six months to supply its products to Chinese clients, NVIDIA would just have to wait two to three months. This would allow the corporation to meet the deadline the United States government set for companies affected by the most recent punishment to adjust to the new market realities.

In addition to impacting GPU sales, it is anticipated that the political decisions will restrict the sale of NVIDIA DGX (Computers for AI) models to China. After September 2023, only a limited number of products can continue to be marketed.

NVIDIA requests TSMC speed up AI GPU production to avoid China sanctions

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