What's Going On With Nvidia Stock?

Reports of Chinese LLM developers seeking alternatives as Nvidia Corp NVDA upcoming compliant chip falls short in performance triggered a selloff. The stock lost close to 3% Thursday.

In response to U.S. export restrictions, Nvidia proposed to release a specialized AI chip for China by the first quarter of 2024. 

Also Read: Nvidia's CEO Sees Long Road to U.S. Chip Independence, Commits to Chinese Market

Nvidia is testing the HGX H20 chip with Chinese server suppliers, but it likely has only about 20% of the computing power of Nvidia's H100. 

Customers might stack multiple H20 chips to compensate, potentially doubling power consumption, Digitimes reports. 

Also, Chinese AI developers, including Baidu Inc BIDU, are turning to alternatives like Huawei Technologies Co's Ascend AI chips due to the H20's limited performance. However, the supply of Huawei's chips is struggling to meet the high demand in China.

Meanwhile, Nvidia's upcoming next-generation GPU will likely be taped out to Taiwan Semiconductor Manufacturing Co TSM by the fourth quarter of 2023, with packaging slated for the second quarter of 2024. 

To support this initiative, Samsung Electronics Co SSNLF is gearing up to potentially cater to Nvidia's packaging needs by investing in 2.5D packaging technology, Digitimes reports. 

Samsung has procured 16 sets of bonding machines from Shinkawa, each costing around $387,000, demonstrating its readiness to handle the high-bandwidth memory (HBM) and 2.5D packaging requirements for Nvidia's GPUs. 

This move is part of Samsung's broader strategy to enhance its packaging capacity and offer comprehensive services in the semiconductor sector. 

Price Action: NVDA shares traded lower by 0.52% at $465.25 premarket on the last check Friday.