1.After H20, NVIDIA’s new special edition GPU is exposed, and the price of a single GPU is as low as $6,500

Export controls have brought Nvidia, which used to hold a 95% share of China’s AI chip market, to 50%. The latest revelations say that Huang will sacrifice a “castrated version” GPU. Can this self-help allow Nvidia to hold the market, or further push customers into the domestic camp?

In response to this situation, Huang is about to unveil an “emasculated” version of the Blackwell GPU.

According to two sources, the GPU will be powered by Nvidia’s latest-generation Blackwell architecture AI processor and is expected to be priced between $6,500 and $8,000, well below the H20’s $10,000 to $12,000 price, with mass production scheduled to begin as early as June.

Investment bank Jefferies estimates that the new regulations limit memory bandwidth to 1.7-1.8TB per second. In comparison, the H20 has a memory bandwidth of up to 4TB per second.

The two sources added that the chip will not use TSMC’s advanced CoWoS (Chip-on-Wafer-on-Substrate) technology.

Huang told reporters this week that Nvidia’s dominance in the Chinese market has been like a storm since the U.S. began imposing export restrictions on chips in 2022, plummeting from a peak of 95 percent to 50 percent.

2.Xiaomi Group’s performance hit a record high

Xiaomi Group announced its financial report, and in the first quarter of 2025, the group’s revenue and profit hit a record high again. In the first quarter of 2025, Xiaomi Group’s total revenue reached a record high of RMB111.3 billion, up 47.4% year-on-year.

In terms of business segments, in the first quarter of 2025, the revenue of the mobile phone × AIoT segment was RMB92.7 billion, a year-on-year increase of 22.8%, and the revenue of the innovative business segments such as smart electric vehicles and AI was RMB18.6 billion. During the quarter, the Group’s adjusted net profit was a record high of RMB10.7 billion, representing a year-on-year increase of 64.5%.

In the first quarter of 2025, 75,869 new vehicles of the Xiaomi SU7 series were delivered. At the same time, the company will expand its production capacity, and the cumulative delivery of Xiaomi SU7 series has exceeded 258,000 units. In the first quarter of 2025, the total revenue of the innovative business segments such as smart electric vehicles and AI was RMB18.6 billion, of which RMB18.1 billion was generated from smart electric vehicles and RMB0.5 billion from other related businesses.

During the quarter, the gross margin of the innovative business segments, such as smart electric vehicles and AI, was 23.2%. In the first quarter of 2025, the operating loss of the innovative business segments such as smart electric vehicles and AI was RMB0.5 billion. In the first quarter of 2025, the company’s R&D expenditure reached RMB6.7 billion, representing a year-on-year increase of 30.1%.

As of March 31, 2025, the number of R&D personnel in the company reached a record high of 21,731, accounting for 47.7% of the total number of employees. In addition, as of March 31, 2025, Xiaomi Group has obtained more than 43,000 patents worldwide. In the first quarter of 2025, the revenue of smart home appliances increased by 113.8% year-on-year. Among them, the shipment of air conditioning products exceeded 1.1 million units, a year-on-year growth rate of more than 65%; The shipment of refrigerator products exceeded 880,000 units, a year-on-year growth rate of more than 65%; The shipment of washing machine products exceeded 740,000 units, with a year-on-year growth rate of more than 100%; Among them, the shipments of washing machines and refrigerators reached a record high.

3.TSMC wants to build an advanced chip factory in the United Arab Emirates

In recent years, Gulf countries such as the United Arab Emirates, Saudi Arabia, Qatar and Kuwait are making a large-scale deployment of artificial intelligence industries, and the demand for advanced chips is increasing. TSMC plans to use its advanced production capacity in AI chip manufacturing to build a factory in the UAE to meet this market demand. The UAE has a number of advantages for building chip factories, including sufficient land resources, abundant energy supply and strong financial support.

TSMC is evaluating the possibility of building an advanced chip manufacturing base in the UAE and has discussed it with Trump administration officials, according to people familiar with the matter. The success of this potentially major investment project in the Middle East will depend on the approval of the U.S. government.

4.The impact of the supply interruption of Western IC tool manufacturers on China’s IC design

If the three major IC design tool vendors in the United States and the West (Synopsys, Cadence, and Siemens EDA) cut off supply, China’s IC design will face the following difficulties:

Technical

Limited R&D of advanced processes: The three giants have monopolized the design tools of advanced processes of 3nm and below, and there is a significant gap in high-end process support for domestic EDA. After the supply cut, Chinese companies will lack key tools in the design of advanced process chips, such as the GAAFET structure design required for chips below 3nm, and the R&D progress will be seriously hindered, affecting the development of key fields such as AI chips and high-performance computing.

Difficulties in physical verification and simulation testing: Domestic enterprises lag behind in key technologies such as physical verification and simulation testing, and without relevant tools such as Synopsys, it is difficult to find out the layout errors of chips of 7nm and below, which makes it difficult to pass the final verification and cannot meet the signoff requirements of foundries such as TSMC and Samsung.

Reduced design efficiency: The tools of the three EDA giants cover the whole process of chip design, and switching domestic tools after the supply is cut off will greatly increase the design verification time, and the R&D cycle may be extended by more than 30%, affecting the speed of product launch and the competitiveness of enterprises.

Ecological dimension

Fragmentation of industrial chain collaboration: The technology ecology of the three major U.S. manufacturers is deeply bound to the process design suites of foundries such as TSMC and Samsung, which will cut off the industrial chain collaboration between domestic enterprises and chip manufacturers, and it may be difficult to submit design drawings to foundries, and there will be problems in the connection from design to manufacturing.

Adaptation of intellectual property rights and standards: For a long time, Chinese enterprises have relied on foreign EDA software, and their design standards and intellectual property libraries have formed a system. After the supply is cut off, it is necessary to re-adapt the design process and IP library, which faces high adaptation costs and intellectual property issues, and may also affect collaboration with international partners.

Talent level

Related talent shortage: China’s EDA industry has a large talent gap, which is estimated to reach 300,000. In the case of supply interruption, enterprises are facing technical problems and ecological reconstruction, and the demand for relevant talents is more urgent, and the shortage of talents will further restrict the development of the IC design industry. The joint training mechanism between universities and enterprises is difficult to improve in the short term, and it is impossible to quickly meet the demand for talents.

However, China’s EDA companies have made certain breakthroughs in recent years with policy support, and are accelerating technological research and market expansion. In the long run, the supply disruption crisis may also become an opportunity to promote the independent and controllable development of China’s semiconductor industry.

5.Nikkei: 100% of China’s domestically produced chip models will be mass-produced in 2026

Even if we have 100% localization capabilities, we cannot give up globalization, which is the right way.

“China has taken a very positive stance in expanding the capacity of its mature node technology, which has put pressure on some segments of the chip market.” Brian Matas, an analyst at TechInsights, said in an interview, “In particular, the analog chip market and most areas of the microcontroller (MCU) market have seen slow growth in recent years, partly because these products rely heavily on mature process nodes, and China’s expansion has driven down prices.”

According to Nikkei Asia, China’s auto industry is accelerating the strategy of chip autonomy, and leading car companies such as SAIC, Changan Automobile, Great Wall Motor, BYD, Li Auto and Geely have launched mass production plans for “domestic chips” models, and at least two of them will achieve the first batch of models off the assembly line in 2026.

According to Sina Finance, the latest policy goal is to achieve 100% independent research and development and manufacturing of automotive chips by 2027, which is significantly faster than the 25% domestic chip adoption rate target set at the beginning of the year.

It is not clear how the self-sufficiency rate of automotive chips will be calculated, but some believe that it is calculated based on the total number of chips used in the vehicle, while others believe that it is calculated based on how many chips are developed or manufactured locally. For example, GAC Group plans to achieve more than 80% domestic chip coverage for all models by 2030, and 12 self-developed chips released by it have passed AEC-Q100 automotive qualification, covering key areas such as 7nm autonomous driving chips and silicon carbide power modules.

For example, China FAW has reached a strategic cooperation with New Unigroup Group, covering the whole chain of on-board computing, control, and storage, and its THA6 series automotive-grade MCUs have been mass-produced.

GAC Group has established a “white list” with more than 20 domestic suppliers to promote the localization of power devices and sensors, and has worked closely with Chinese foundries such as SMIC and CanSemi Technology to evaluate the entire automotive chip supply chain and assist in verifying domestic alternative chips.

In October 2020, Leapmotor released the Lingxin 01 intelligent driving chip, which uses 28nm process and has a maximum computing power of 4.2TOPS, which is the first to be installed on the Leapmotor C11.

In March 2023, the Longying No. 1 7nm intelligent cockpit chip developed by Geely Automobile’s Silicon Engine Technology rolled off the assembly line in mass production, and in September of the same year, it was first installed on the Lynk & Co 08, and later installed in multiple brand models. In October 2024, Xingchen No. 1, an intelligent driving chip with 7nm process and 512TOPS computing power, released by it, is scheduled to be mass-produced this year.

In November 2024, the 4nm process intelligent cockpit chip customized by BYD and MediaTek BYD9000 launched with the Leopard Leopard 8.

At the end of 2023, the first self-developed intelligent driving chip released by NIO, the Shenji NX9031, is based on 5nm and has a computing power of over 1000TOPS, which will be successfully taped out in July 2024 and delivered with NIO ET9 from April this year.

It is also reported that Xpeng Motors has designed a “Turing chip” that focuses on artificial intelligence, and said that its maximum computing power is 700TOPS, which is better than the products of the American chip giant Nvidia, and is designed to power the next generation of smart cars, which will be applied to the Xpeng G7 first. In July 2023, Volkswagen spent $700 million to acquire a 4.99% stake in Xpeng, and the two parties formed a strategic alliance to jointly develop electric vehicles for the Chinese market, and are preparing to purchase Xpeng’s self-developed Turing chips.

Despite the acceleration of the localization process, there are still bottlenecks in the field of high-end chips. At present, the localization rate of China’s automotive chips is less than 10%, especially in the field of autonomous driving chips, Nvidia and Qualcomm still occupy a dominant position. For example, although NIO announced that its self-developed 5nm intelligent driving chip “Shenji NX9031” has been successfully taped out, it will still take time for mass production and installation.

In addition, while the process from R&D to certification of automotive chips is complex and long, often up to five years, Chinese EV manufacturers have adopted a more flexible strategy to use consumer-grade, off-the-shelf chips for non-critical functions, shortening the testing and certification time to 6-9 months, thereby accelerating the use of domestic chips.

However, industry experts pointed out that automotive-grade chips need to meet strict standards such as extreme temperature and humidity from -40°C to 155°C, anti-electromagnetic interference, etc., and the technical barriers are much higher than those of consumer-grade chips. In addition, underlying technologies such as ARM architecture licensing and EDA tools still rely on overseas, and domestic chips are facing challenges in ecological compatibility.

“China has taken a very positive stance in expanding the capacity of its mature node technology, which has put pressure on some segments of the chip market.” Brian Matas, an analyst at TechInsights, said in an interview, “In particular, the analog chip market and most areas of the microcontroller (MCU) market have seen slow growth in recent years, partly because these products rely heavily on mature process nodes, and China’s expansion has driven down prices.”

According to the data of the China Passenger Car Association, the retail penetration rate of new energy vehicles in China will reach 51.1% in 2024, but the localization rate of bicycle chips will be less than 15%. The president of GAC Research Institute revealed that the cost of its self-developed chips is 40% lower than that of imported products, but it needs to be equipped on a large scale in 2025 to form a cost advantage.

International giants are also accelerating their localization layout. Infineon, NXP and others are expanding their production capacity in China by cooperating with Chinese foundries. STMicroelectronics has established a joint venture with Geely’s subsidiaries to focus on the research and development of silicon carbide devices. In an interview with Nikkei Asia, Infineon CEO Jochen Hanebeck said that Chinese customers are asking him to localize chip production to meet the needs of the Chinese market.

TechInsights estimates that by 2025, China’s locally produced integrated circuits will only meet about 17.5% of the domestic demand of about $185 billion. However, according to the International Semiconductor Industry Association (SEMI), China’s production capacity of mature process chips (i.e., 14nm or higher) is expected to increase from 31% in 2023 to nearly 40% in 2027.