American technology company Nvidia has placed an order for 300,000 H20 GPUs from a Taiwanese semiconductor manufacturer, responding to growing demand in the Chinese market. This move was a direct consequence of the recent decision of the US administration, which allowed the resumption of exports of these chips to China after the previously imposed ban.
The H20 model was developed specifically for the Chinese market in response to restrictions imposed at the end of 2023, which concerned more powerful chips of the H100 family and the latest Blackwell line. Although the H20 is inferior in computing performance to other Nvidia products, its architecture remains in demand in China, where it is actively used in the implementation of local AI platforms and models.
Prior to placing the new order, Nvidia already had a stock of H20 chips in the amount of 600 to 700 thousand units. In 2024, sales of this model in the global market were estimated at one million units. However, the company has been forced to rethink its strategy and ramp up shipments in response to strong interest from Chinese customers.
Earlier in April, the company suspended sales of the H20 due to regulatory restrictions, leading to the risk of a $ 5.5 billion inventory write-down. Potentially lost revenue, as noted by the head of the company Jensen Huang, could reach $ 15 billion.
According to the sources, Nvidia has already requested updated documentation from potential buyers in China indicating the projected volume of purchases in order to assess the sustainability of demand. The final decision to restart production will depend on the volume of applications received. The supply chain recovery cycle is expected to take up to nine months.
At the same time, shipments of H20 chips require export licenses issued by the US Department of Commerce. Despite preliminary assurances in July that they were ready to issue permits, they have not been officially approved at the time of publication. Neither Nvidia, nor chip manufacturer TSMC, nor U.S. government agencies provided additional comments on the current status of the applications.
The geoeconomics factor has a special significance in the history of H20. The decision to restore exports was part of negotiations between the United States and China regarding the supply of rare earth materials that are strategically important for a number of high-tech industries.
The position of US lawmakers remains ambiguous: on the one hand, there is concern about the possible loss of technological leadership in the field of AI, on the other — leading companies are trying to maintain their positions in the Chinese market, preventing the full transition of local developers to alternative platforms, including Huawei products.
Interest in Nvidia products in China is confirmed not only by active orders, but also by the growing demand for service of previously delivered models, the supply of which was limited. Given the scale of the Chinese IT sector and the intensity of development of its own AI models, maintaining access to Nvidia technologies remains important from both a commercial and geostrategic point of view.
