Nvidia Anticipates Resuming H20 Chip Sales to China After U.S. Approval

Nvidia announced on Tuesday its expectation to restart sales of its H20 general processing units to China. This development represents a significant positive turn for the company, which had been impacted by U.S. export restrictions.

The U.S. government had previously informed Nvidia that selling these chips to China would require a license, effectively halting sales. The H20 chips were specifically designed to circumvent earlier export controls imposed on Beijing. Nvidia stated that the U.S. government has assured them licenses will be granted, and they anticipate deliveries to commence soon.

Nvidia's CEO, Jensen Huang, has been actively advocating against export controls, arguing they hinder American technological leadership. He previously stated that chip restrictions had nearly halved Nvidia's market share in China. This potential shift in the U.S. stance follows a meeting between Huang and U.S. officials.

A preliminary trade framework agreed upon last month between Washington and Beijing allowed for the easing of rare-earth export controls by China and a relaxation of tech export restrictions by the U.S. Huang also announced a new "fully compliant" GPU, the RTX PRO, designed for smart factories and logistics.

The potential resumption of H20 chip sales to China is unexpected. According to Ray Wang, a research director, this is a positive development for Nvidia, allowing them to reinforce their leadership in China. He anticipates the resumption of H20 shipments, along with the upcoming release of new export control-compliant AI chips for the Chinese market, will act as a growth catalyst.

On Tuesday, Nvidia also confirmed that Huang was in China, meeting with government and industry officials to discuss the benefits of AI and ways to advance safe and secure AI.

Some chip experts had anticipated that the initial export controls on the H20 chip would benefit local Nvidia alternatives. However, while China's AI chip sector has made progress, it still lags behind Nvidia and foundries like Taiwan Semiconductor Manufacturing Co. Louise Loo, lead economist for China at Oxford Economics, noted that a reversal of the H20 export controls would give Chinese manufacturers more time as they await advancements in their indigenous technology.