Key Points
- Nvidia has placed new orders for 300,000 H20 AI chips with manufacturer TSMC.
- The move is driven by strong demand from China following the U.S. government’s recent reversal of a sales ban.
- The H20 chip is a less-powerful version that Nvidia created specifically for the Chinese market.
- Nvidia is still awaiting approval from the U.S. government for the necessary export licenses.
It appears that strong demand from China has prompted Nvidia to revise its plans. The company has reportedly placed new orders for 300,000 of its H20 AI chips with the manufacturer TSMC. This comes just weeks after the Trump administration reversed its ban and allowed Nvidia to resume selling the chips to Chinese customers.
Initially, Nvidia was expected just to sell off its existing stockpile. Still, sources say the high demand prompted the new production run.
The H20 chip was specifically designed for the Chinese market after the U.S. blocked sales of more powerful AI chips late last year. While it’s not as capable as the chips sold elsewhere, it remains highly sought after by Chinese tech giants such as Tencent and Alibaba. The new 300,000-chip order will supplement Nvidia’s existing inventory of approximately 600,000 to 700,000 units.
Before the chips can be shipped, Nvidia still needs to obtain export licenses from the U.S. government. However, the company says it has been assured that they will be approved soon. The decision to allow sales is part of broader trade negotiations with China over rare earth magnets and has drawn criticism from some U.S. lawmakers.
However, Nvidia argues it’s crucial to stay in the Chinese market to prevent developers from switching entirely to rivals like Huawei. The original ban was a major financial blow for Nvidia, costing it billions in write-offs and lost sales.
