Under the pressure of technological competition and tension between China and the United States, Huang Renxun, CEO of Nvidia, visited Chinese Mainland every four years and attended the company's annual meeting.
Analysis suggests that Huang Renxun's trip to China may be a response to the US restrictions on Nvidia's chip exports to China, with the aim of seeking more business opportunities and partners.
After four years
Huang Renxun is a Chinese American born in Taiwan, China, China. He has served as the CEO of Nvidia for more than 30 years.
According to media reports, he visited Nvidia's offices in Beijing, Shanghai, and Shenzhen in the past week and also attended the company's annual meeting in Shanghai.
According to photos released by multiple NVIDIA China employees on January 20th, the 60 year old CEO wore the traditional "Northeast Big Flower" and even performed yangko at the annual meeting.
A spokesperson for Nvidia stated on Sunday that Huang Renxun's visit to China is to "celebrate the New Year with employees", and he declined to disclose further details. Overall, this was a relatively low-key visit, and the initial confidentiality work was also very effective.
Huang Renxun last visited Chinese Mainland in December 2019, during which he talked about the application of AI in the automotive, gaming and medical industries.
It is reported that last June, he planned to visit Shanghai and meet with senior executives of technology companies including Tencent, Xiaomi, ByteDance, etc. However, the itinerary was ultimately cancelled.
Facing challenges
At the same time as celebrating the New Year, Huang Renxun's visit to China is also seen as a journey to find an antidote.
On October 17th last year, the US government issued a series of chip export restrictions, further strengthening export restrictions on artificial intelligence related chips and semiconductor manufacturing equipment to China.
As an American chip giant, Nvidia's high-performance AI chip exports are restricted and facing increasing challenges.
It is reported that the market size of artificial intelligence chips in Chinese Mainland is about US $7 billion, of which Nvidia accounts for more than 90% of the market share.
Based on Nvidia's financial performance over the past year (February 2022 to January 2023), the Chinese market revenue, including mainland China, Hong Kong, and Taiwan, accounted for 47% of its total revenue.
However, after the new ban is issued, Nvidia expects its sales in the Chinese market to "significantly decline" in the fourth quarter of 2023.
This is related to more customers turning to local semiconductor suppliers in response to the US chip ban.
Industry insiders say that Chinese tech giants like Tencent and Alibaba are refusing to use Nvidia's low-power artificial intelligence chips and are shifting some chip orders to local suppliers, thereby reducing their dependence on American chip manufacturers.
The demand side has expressed that they are more willing to use local chips produced by companies such as Huawei compared to imported artificial intelligence chips from overseas.
According to statistics from the General Administration of Customs of China, China imported 479.5 billion chips in 2023, a year-on-year decrease of 10.8%, valued at $349.4 billion, a year-on-year decrease of 15.4%.
Find a way
Recently, the International Semiconductor Industry Association (SEMI) released its 2024 global wafer fab forecast report. The report expects that Chinese Mainland will expand its share of global semiconductor production capacity, and 18 new wafer factories will be put into production throughout the year, with the capacity growth rate increasing from 12% in 2023 to 13% in 2024, and the monthly capacity will increase from 7.6 million to 8.6 million pieces.
In this context, Nvidia probably doesn't want to miss any opportunities. Analysts believe that one of the purposes of Huang Renxun's trip to China is likely to establish partnerships with local companies to maintain Nvidia's market share in China.
Meanwhile, Nvidia is also conducting targeted development work.
It is reported that Nvidia is developing the "latest improved version" of AI chips for the Chinese region, including three new graphics cards aimed at consumers launched at the 2024 International Consumer Electronics Show (CES) held in Las Vegas earlier this year.
According to insiders, Nvidia plans to begin mass production of an artificial intelligence chip specifically designed for China in the second quarter of 2024 to comply with US export regulations.
"We must produce new chips that meet the regulations. Once we meet the regulations, we will return to the Chinese market," Huang Renxun said at a conference last year.
Last month, US Commerce Secretary Raymond stated that the Biden administration is in discussions with US chip manufacturer Nvidia to allow Nvidia to sell artificial intelligence chips to China to a limited extent.
Raymond stated that NVIDIA has the ability and should also sell artificial intelligence chips to China, while emphasizing that it cannot export the most complex and powerful artificial intelligence chips to China.
Finding an appropriate balance between government relations and Chinese clients is not an easy task for Nvidia, "but a 'significant process' that requires time."