NVIDIA Corp has told Chinese customers it is delaying the launch of a new artificial intelligence (AI) chip, H20, until the first quarter of 2025, Reuters reported on Friday, citing two sources familiar with the matter.
H20, the most powerful of three China-focused chips Nvidia has developed to comply with US export restrictions, is purportedly being delayed because server vendors were having problems integrating the semiconductor, the media outlet noted.
Wedbush Securities analysts, in an update to clients, noted that they "struggle somewhat" with the explanation given the part's reduced specifications, which should make it easier to integrate within a system.
"Given NVIDIA's strong backlog in other regions, we don't see delays as particularly impactful to near-term revenues or earnings," the analysts wrote.
"However, over the intermediate term, we view NVIDIA's ability to ship into China as potentially meaningful in determining how long NVIDIA supply remains below demand and at what level revenues peak during the current cycle," they added.
The delay could complicate its efforts to preserve market share in China against local rivals like Huawei, according to Reuters.
Nvidia has also been planning two other chips, the L20 and L2, to comply with new US export rules, however, L20 is still expected to launch this quarter.
Shares of Nvidia slipped 0.8% to $483.51 in early trading on Friday.
Contact Sean at sean@proactiveinvestors.com