NVIDIA GPU 'A100' and 'H100' Demand Increasing in China
Due to prolonged US sanctions, an underground market for semiconductor transactions has reportedly formed in China, where importing NVIDIA's high-performance artificial intelligence (AI) semiconductors has become difficult. A small quantity of cutting-edge semiconductors smuggled into China through various sanction evasions is in such high demand that even at prices more than double the normal rate, supply is scarce.
According to major foreign media on the 20th, at an electronics market in Shenzhen, China, NVIDIA's AI-optimized graphics processing unit (GPU) A100 is being traded at $20,000 (approximately 26 million KRW). Considering that the usual price was around $10,000, the price has doubled. Despite the high price, stores reportedly do not actively promote sales but quietly show the products mainly to customers who request them.
The A100 is a GPU optimized for AI. The next higher-tier GPU is the H100. Both models are experiencing supply shortages as the generative AI market heats up following the emergence of ChatGPT. It is estimated that more than 30,000 A100 cards are needed to create AI like ChatGPT.
Currently, China’s import route for NVIDIA’s advanced semiconductors is blocked. In the past, NVIDIA exported high-performance semiconductors such as the A100 and H100 to China, but the US government blocked exports starting from August last year, when the Semiconductor Support Act was fully implemented, citing concerns that China could use them for military purposes. Consequently, NVIDIA is supplying China with lower-spec models, the A800 and H800. The A800 operates slower than the A100, capable of 400GB computations per second, while the A100 supports 600GB computations per second.
Given this situation, it is not easy to obtain high-performance A100 and H100 GPUs in China. Currently, selling US-made semiconductors within China is not illegal. However, due to US export regulations, sellers importing and selling these products must undergo investigations by US and Chinese authorities, leading many sellers to avoid this and effectively form an underground market for transactions.
Instead, sellers can acquire small quantities of semiconductors. When NVIDIA’s US customers release leftover inventory after use, Chinese sellers purchase these or import them from regions outside the US such as India, Taiwan, and Singapore. Therefore, while it is difficult for sellers to purchase semiconductors in bulk, they secure small quantities and bring them into China.
Because of the difficulty in procurement, prices in China are higher than normal retail prices. A startup founder in Hong Kong recently revealed that he is meeting sellers to purchase 2 to 4 new A100 cards for AI model development. He said, "I am dealing with two sellers," explaining that they purchase semiconductors from outside the US and sell each A100 card for 150,000 Hong Kong dollars (approximately 25 million KRW). The sellers clearly stated that there is no warranty or support for these purchases.
Those purchasing NVIDIA’s high-performance semiconductors in China are mainly application (app) developers, startups, researchers, and gamers. It is also known that some local governments in China procure semiconductors through this method.
Charlie Chai, an analyst at 86Research based in Shanghai, China, said that the US is unlikely to take action over small-volume semiconductor transactions, adding, "Stronger restrictions will only be imposed when China is perceived as a serious threat."
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