BEIJING/SHANGHAI/NEW YORK: Nvidia has placed an order for 300,000 more H20 chips with contract manufacturer TSMC, two sources told Reuters, as strong demand from Chinese clients prompted the U.S. chipmaker to shift course and supplement its existing stockpile.
One source said robust interest from Chinese firms drove the decision, just weeks after the Trump administration reversed an effective ban on the sale of H20 GPUs to China. That ban, introduced in April over national security concerns, had threatened Nvidia’s foothold in the world’s second-largest AI market.
“It depends on the level of orders,” Nvidia CEO Jensen Huang said during a recent trip to Beijing. He noted that any resumption in production would require about nine months to ramp up.
The H20 chip was specifically developed to comply with U.S. export controls after restrictions were imposed in 2023 on more advanced GPUs like the H100 and Blackwell series. Though less powerful, the H20 remains compatible with Nvidia’s widely used AI software tools, a key advantage in the Chinese market.
Nvidia had previously indicated it would rely on its inventory of 600,000–700,000 H20 chips, but the new orders point to renewed momentum. For comparison, according to SemiAnalysis, Nvidia sold around 1 million H20 units in 2024.
The Information reported after Huang’s China visit was that Nvidia had limited H20 supplies and no immediate plans to resume wafer production. The recent shift suggests that it has changed, though the orders are still contingent on U.S. export licenses.
Nvidia has said it expects to receive approvals soon, but the U.S. Department of Commerce has yet to grant them, according to one of the sources and a third individual familiar with the matter.
In the meantime, Nvidia has asked prospective Chinese buyers to submit updated order forecasts and supporting documentation, sources said.
Neither Nvidia nor TSMC commented on the orders or license status, and the U.S. Commerce Department also did not respond to requests for comment.
The H20’s reinstated availability comes amid broader trade negotiations between Washington and Beijing over rare earth magnets—critical components in industries ranging from EVs to defense.
Still, the Biden administration’s decision to allow resumed sales has sparked bipartisan criticism in Congress, where lawmakers fear it could weaken U.S. efforts to lead in AI innovation.
Nvidia and industry analysts argue that continuing to serve Chinese customers is critical. Pulling back, they say, risks driving developers toward domestic alternatives such as Huawei, whose less powerful chips have gained traction in the wake of U.S. bans.
Before April’s restrictions, Chinese tech giants like Alibaba, ByteDance, and Tencent were already increasing orders of H20 chips, especially for running cost-efficient AI models such as DeepSeek.
Even with U.S. sanctions in place, the demand for Nvidia hardware hasn’t waned. Smuggling and repairs of older banned chips have surged, further underscoring Nvidia’s popularity in China.
The company previously warned that the April ban could force it to write off US$5.5 billion in unsold inventory and cost it $15 billion in lost sales.