Nvidia (NVDA) halts H20 chip production in response to China directive
Nvidia has reportedly halted production of its China-focused H20 AI chip after receiving instructions from Beijing discouraging local firms from purchasing the product.
Key Points
- Production Halt: Suppliers such as Amkor Technology and Samsung Electronics were told to stop work on the H20 chip.
- Reason: The suspension follows a Chinese government directive citing security concerns around the U.S.-designed chip.
- Nvidia’s Position: The company has stated that the H20 was never intended for military or government use and is actively managing its supply chain, though it has not officially confirmed the halt.
Background
- Earlier this year, U.S. export restrictions blocked H20 shipments to China, though a partial reversal in June allowed downgraded AI chips to be exported.
- On August 11, Nvidia and AMD agreed to share 15% of China-related chip revenue with the U.S. government in exchange for export permissions.
- Chinese regulators pushed back, urging companies to avoid H20 chips and framing them as a potential security risk.
What’s Next
- B30A Chip Development: Nvidia is shifting toward a new chip, the B30A, a scaled-down version of its next-generation Blackwell architecture designed to comply with U.S. export rules while remaining more powerful than the H20.
- Market Reaction: Nvidia shares slipped more than 1% in overnight trading, with related chipmakers like AMD and TSMC also seeing minor declines.