The GPU, or graphics processing unit, will be part of Nvidia’s latest generation Blackwell-architecture AI processors and is expected to be priced between $6,500 and $8,000, well below the $10,000-$12,000 the H20 sold for, according to two of the sources.

The lower price reflects its weaker specifications and simpler manufacturing requirements.

The new AI chipset for China will be part of Nvidia’s latest generation Blackwell-architecture AI processors and is expected to be priced between $6,500 and $8,000, according to two of the sources. AFP via Getty Images

It will be based on Nvidia’s RTX Pro 6000D, a server-class graphics processor and will use conventional GDDR7 memory instead of more advanced high bandwidth memory, the two sources said.

They added it would not use Taiwan Semiconductor Manufacturing Co.’s advanced Chip-on-Wafer-on-Substrate, or CoWoS, packaging technology.

The new chip’s price, specifications and production timing have not previously been reported.

The three sources Reuters spoke to for this article declined to be identified as they were not authorized to speak to media.

An Nvidia spokesperson said the company was still evaluating its “limited” options. “Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market.”

TSMC declined to comment.

Nvidia CEO Jensen Huang said last week the company’s older Hopper architecture – which the H20 uses – cannot accommodate further modifications under current U.S. export restrictions. AFP via Getty Images

China remains a huge market for Nvidia, accounting for 13% of its sales in the past financial year. It’s the third time that Nvidia has had to tailor a GPU for the world’s second-largest economy after restrictions from U.S. authorities who are keen to stymie Chinese technological development.

After the U.S. effectively banned the H20 in April, Nvidia initially considered developing a downgraded version of the H20 for China, sources have said, but that plan didn’t work out.

Nvidia CEO Jensen Huang said last week the company’s older Hopper architecture – which the H20 uses – can no longer accommodate further modifications under current U.S. export restrictions.

Nvidia’s market share in China has plummeted to 50% currently from 95% before 2022, when U.S. export curbs that impacted its products began. REUTERS

Reuters was unable to determine the product’s final name.

Chinese brokerage GF Securities said in a note published on Tuesday that the new GPU would likely be called the 6000D or the B40, though it did not disclose pricing or cite sources for the information.

According to two of the sources, Nvidia is also developing another Blackwell-architecture chip for China that is set to begin production as early as September. Reuters was not immediately able to confirm specifications of that variant.

Nvidia’s market share in China has plummeted from 95% before 2022, when U.S. export curbs that impacted its products began, to 50% currently, Huang told reporters in Taipei this week. Its main competitor is Huawei HWT.UL which produces the Ascend 910B chip.

Huang also warned that if U.S. export curbs continue, more Chinese customers will buy Huawei’s chips.

The H20 ban forced Nvidia to write off $5.5 billion in inventory and Huang told the Stratechery podcast on Monday that the company also had to walk away from $15 billion in sales.

Huang has warned that more Chinese customers will buy Huawei’s chips if U.S. export curbs continue. AFP via Getty Images

The latest export restrictions introduced new limits on GPU memory bandwidth – a crucial metric measuring data transmission speeds between the main processor and memory chips. This capability is particularly important for AI workloads that require extensive data processing.

Investment bank Jefferies estimates that the new regulations cap memory bandwidth at 1.7-1.8 terabytes per second. That compares with the 4 terabytes per second that the H20 is capable of.

GF Securities forecast the new GPU will achieve approximately 1.7 terabytes per second using GDDR7 memory technology, just within the export control limits.

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Tesla has promised affordable vehicles beginning in the first half of the year, offering a potential boost to flagging sales. Global production of the lower-cost Model Y, internally codenamed E41, is expected to begin in the US, the sources said, but it would be at least months later than Tesla’s public plan, they added, offering a range of revised targets from the third quarter to early next year.

The reason for the delay was not clear.

Two of the people said Tesla aimed to produce 250,000 of the cheaper Model Ys in the US in 2026. The new vehicle is also planned for eventual production in China and Europe, Reuters has previously reported. The delay of US production and the production target have not been previously reported.

Tesla has promised affordable vehicles beginning in the first half of the year, offering a potential boost to flagging sales. Tesla Model Y cars in Beijing, above. AFP via Getty Images

Tesla reports results on Tuesday, and plans for the new vehicles are a major question.

The less expensive mass-market vehicles have been widely anticipated by Tesla fans and investors who hope they will attract a fresh group of customers and reverse the EV maker’s falling sales and eroding market share. Tesla also has refreshed its original Model Y with exterior and interior changes. The Long Range All-Wheel Drive version in the US costs about $49,000, before a $7,500 federal tax credit.

Reuters reported last month that the China launch of the E41 will occur in 2026. The E41 will be smaller and cost 20% less to produce than the refreshed Model Y, the sources familiar with China plans told Reuters. The timing of the rollout in Europe is not clear.

Tesla is also planning to launch a bare-bones version of its Model 3 compact sedan, three people said.

Tesla did not immediately respond to a request for comment on the delay of production of the cheaper Model Y, production targets and other details reported here.

Analysts expect Tesla sales to fall again this year for several reasons, including damage to the brand reputation by Chief Executive Elon Musk’s close work with President Trump. REUTERS

The EV maker on Jan. 2 reported its first decline in annual deliveries last year, and analysts expect sales to fall again this year for several reasons, including damage to the brand reputation by Chief Executive Elon Musk’s close work with President Trump and support of far-right European politicians.

Another challenge for Tesla is that its vehicles are aging and there is no relatively cheap model.

Musk earlier promised a new, cheaper EV platform with cars expected to be priced as low as $25,000, but dropped that to prioritize robotaxi development.

Musk and Trump at the White House in March. AFP via Getty Images

Automakers are grappling with prospects of rising prices and supply-chain disruption, after Trump imposed 25% tariffs on vehicles and auto parts imported from outside the US.

Tesla has increased North American sourcing for parts of many models over the last two years, which would decrease tariff exposure for the E41, two people aware of the matter said. It recently suspended plans to ship components from China to the US for the Cybercab and Semi truck due to tariffs, one person told Reuters earlier this week.

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