BEIJING: Nvidia has placed orders for 300,000 H20 chips with Taiwan Semiconductor Manufacturing Co (TSMC) following strong demand from China, two sources familiar with the matter said.
One source noted that the surge in demand led Nvidia to reconsider relying solely on existing stockpiles.
The orders come after the Trump administration recently allowed Nvidia to resume H20 GPU sales to China, lifting an April ban aimed at restricting China’s access to advanced AI chips over national security concerns.
The H20, designed specifically for the Chinese market, offers less computing power than Nvidia’s H100 or Blackwell series sold elsewhere.
The new TSMC orders will supplement Nvidia’s current inventory of 600,000 to 700,000 H20 chips, according to the sources, who requested anonymity as they were not authorised to speak publicly.
For context, Nvidia sold around 1 million H20 chips in 2024, as reported by research firm SemiAnalysis.
Nvidia CEO Jensen Huang, during a Beijing visit this month, indicated that production resumption would depend on order volumes, adding that restarting the supply chain could take nine months.
A report by The Information later revealed that Nvidia informed customers of limited H20 stocks and no immediate plans to restart wafer production.
The company still requires U.S. export licenses to ship the chips, though it said in mid-July that approvals were expected soon.
However, the Commerce Department has yet to grant these licenses, according to one source and a third insider.
Nvidia declined to comment on the new orders or license status, while TSMC and the Commerce Department did not respond to requests for comment.
Chinese firms interested in purchasing H20 chips have been asked to submit updated documentation, including client order forecasts, two additional sources said.
The H20 has become a focal point in U.S.-China trade tensions. The Trump administration linked its sales resumption to rare earth magnet negotiations, drawing criticism from U.S. lawmakers concerned about China gaining AI tech access. Nvidia, however, argues that maintaining Chinese market engagement prevents a shift to rivals like Huawei.
Before the April ban, Chinese tech giants Tencent, ByteDance, and Alibaba had significantly increased H20 orders for AI model deployment.
Despite Huawei’s competing offerings, Nvidia’s popularity in China remains high, evidenced by demand for smuggled banned GPUs.
Following the April restrictions, Nvidia warned of a $5.5 billion inventory write-off, while Huang cited $15 billion in lost potential sales. - Reuters
