Nvidia has confirmed that it is working on a new graphics chip for the Chinese market, but said nothing was ready yet.

The world leader in GPU accelerators also confirmed an earlier report that the new unit would not be using the Hopper architecture, which drove its previous China-oriented H20 chip.

At a post-earnings call, Nvidia chief executive Jensen Huang said the company wanted to “continue to serve the Chinese market” with “interesting products”.

New chip

He added, “We don’t have anything at the moment, but we’re considering it.”

Nvidia tailored the H20 chip to comply with earlier US export controls, but the chip was banned for export in a surprise move earlier this year that cost the company billions and left it without a product it could sell to Chinese companies.

China is a significant market for Nvidia, accounting for about 14 percent of its total revenue in its most recent financial year.

Huang confirmed an earlier Reuters report that the Hopper architecture would not be used for an upcoming chip.

The latest export ban “ended our Hopper data centre business in China”, Huang said, because the architecture could not be modified to reduce its performance any further.

HSBC analysts said a new China-focused chip could generate around $3 billion (£2.2bn) in the second half of Nvidia’s current financial year up to the end of January, but said it would be unlikely to fully make up for the loss of H20 revenues.

Competition

A bigger concern for Nvidia is that the export ban is spurring competition from domestic companies such as Huawei that are filling the gap with their own technologies, Huang said.

“The US has based its policy on the assumption that China cannot make AI chips,” Huang told analysts on the call.

“That assumption was always questionable and now it’s clearly wrong,” he said, adding that US rules could “drive half of the world’s AI talent to rivals”.

Nvidia last week reported first-quarter revenues surging 69 percent year-on-year, and gave a positive forecast for the second quarter in spite of an $8bn revenue loss from the ban on H20 chips.