Artificial intelligence (AI) semiconductor manufacturer Nvidia has reportedly placed a new order for 300,000 H20 chips with Taiwan's TSMC for export to China.
On July 29 (local time), foreign media outlets including The Economic Times reported that Nvidia placed a new production order with TSMC last week to cope with surging demand in China. This represents a shift from the previous approach of selling products held in inventory.
The H20 chip is a lower-specification chip developed by Nvidia to circumvent U.S. government regulations that restricted the export of advanced semiconductors to China at the end of 2023 for national security reasons. Although the H20 does not offer computing performance as powerful as Nvidia's H100 or Blackwell series, it is known to have many applications in China.
The U.S. government also banned the export of H20 chips to China in April of this year. However, earlier this month, following persuasion from Nvidia CEO Jensen Huang, authorities announced that they would allow exports again.
Currently, in addition to this new order, Nvidia is known to have a stockpile of 600,000 to 700,000 H20 chips. In order to export these chips to China, Nvidia must obtain approval from authorities. According to sources, the U.S. Department of Commerce has not yet granted approval. However, Nvidia stated that it received a response from authorities in mid-July indicating that approval would likely be granted soon.
According to U.S. market research firm SemiAnalysis, Nvidia sold approximately 1 million H20 chips last year. During a recent visit to Beijing, China, CEO Jensen Huang stated that whether production of the H20 chip would resume would depend on the volume of orders, and that it would take nine months to restart the supply chain.
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