Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week.
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Nvidiaplacedordersfor300,000H20chipsets with contract manufacturerTSMClast week, twosourcessaid, with one of them adding that strong Chinesedemandhad led the U.S. firm to change its mind about just relying on its existing stockpile.
The Trump administration this month allowedNvidiatoresume salesofH20graphics processing units (GPUs) toChina, reversing an effective ban imposed in April designed to keep advanced AIchipsout of Chinese handsdueto national security concerns.
Nvidiadeveloped theH20specifically for the Chinese market after U.S. export restrictions on its other AIchipsets were imposed in late 2023. TheH20does not have as much computing power asNvidia’s H100 or its new Blackwell series sold in markets outsideChina.
The neworderswith Taiwan’s TMSC would add to existing inventory of 600,000 to 700,000H20chips, according to thesourceswho were not authorized to speak to media and declined to be identified.
For comparison purposes,Nvidiasold around 1 millionH20chipsin 2024, according to U.S. research firm SemiAnalysis.
NvidiaCEO Jensen Huangsaidduring a trip to Beijing this month that the level ofH20ordersit received would determine whether production would begin again, adding that any restart to the supply chain would take nine months.
The Information reported after Huang’s trip thatNvidiahad told customers it had limitedH20stocks available and it had no immediate plans to restart wafer production for the GPU.
Nvidianeeds to obtain export licensesfromthe U.S. government to ship theH20chips. It said in mid-July it had been assured by authorities that it would get them soon.
The U.S. Department of Commerce has yet to approve those licenses, one of thesourcesand a third source said.
Nvidiaon Monday declined to comment on the newordersor the status of its license applications.TSMCdeclined to comment. The U.S. Commerce Department did not immediately respond to a request for comment.
Nvidiahas asked Chinese companies interested in purchasingNvidiaH20chipsto submit new documentation including order volume forecastsfromclients, said one of thesourcesand a fourth source.
Key product in U.S.-Sino trade war
The Trump administration said the resumption ofH20sales was part of negotiations withChinaover rare earth magnets – elements essential for many industries and which Beijing had limited exports of as trade war tensions escalated.
The decision drew bipartisan condemnationfromU.S. legislators who are worried that givingChinaaccess to theH20will impede U.S. efforts to maintain its lead in AI technology.
ButNvidiaand others argue that it is important to retain Chinese interest in itschips– which work withNvidia’s software tools – so that developers do not completely switch over to offeringsfromrivals like Huawei.
Before the April ban, Chinese technology giants including Tencent, ByteDance and Alibabasubstantially increasedH20ordersas they deployed DeepSeek’s cost-effective AI models as well as their own models.
The popularity ofNvidiaproducts inChina, despite the advent of rival, albeit less powerful, offeringsfromHuawei, has been underscored by aboomin repairdemandfor its other banned GPUS – many of which have been smuggled into the country.
After the April ban onH20sales,Nvidiawarned that it would have to write off $5.5 billion in inventories, while Huang told the Stratechery podcast that the company also had to forgo $15 billion in potential sales.
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