NVIDIA places a 300,000-unit H20 chip order with TSMC to meet rising demand in China as US export rules see partial relaxation.
Published on
5 min read

NVIDIA Orders 300,000 H20 Chips in Response to China’s Rising Demand

NVIDIA has asked contract chip manufacturer, Taiwan Semiconductor Manufacturing Company, to supply 300,000 H20 chipsets. According to Reuters, NVIDIA’s H20 chip order is due to high Chinese demand that has caused the US chip maker to increase its current stock. 

Boosting H20 Stocks 

NVIDIA’s new H20 chip order for China will push its inventory to about a million chips. Currently, the inventory stands at between 600,000 to 700,000 H20 chips. The US chip company specifically designed H20 semiconductors for the Chinese market following restrictions on other AI chips in 2023.

 H20’s computing power is not as high as NVIDIA’s Blackwell or H100 chips that are sold outside China. The US government allowed NVIDIA to resume the sale of H20 chips to China at the beginning of this month. This decision reversed an export ban that had been in force since April as the US sought to keep advanced AI chips out of Chinese reach over national security concerns. 

While on a trip to China this month, NVIDIA CEO Jensen Huang said H20 order volume will determine when the company will commence production. Huang estimated that resumption of the supply chain could take up to nine months. Following Huang’s trip, NVIDIA advised customers that its H20 stocks were limited. The company also said that it did not have plans to commence wafer production for the chips. 

NVIDIA needs to obtain licenses from the US government  to ship the chips to the Chinese market. Despite this commitment, sources close to NVIDIA say that the Department of Commerce in the US has not approved the export licenses yet. 

Earlier this month, the company said the government had committed to providing the licences soon. NVIDIA has requested Chinese tech companies that are interested in purchasing its H20 chips to submit new requests alongwith order volume forecasts. 

US-China Trade Negotiations 

The US government said that the resumption of H20 chip sales in China was a part of its negotiation with Beijing over rare earth magnets. These elements are critical in numerous industries. Beijing had imposed export curbs on rare earth after trade tensions between the US and China escalated in April 2025. 

US legislators have condemned President Donald Trump’s administration decision to resume H20 exports to China. The legislators expressed concerns that the move could undermine US efforts to lead in the global AI race. In May this year, a lawmaker in the US announced plans to introduce an NVIDIA chip smuggling bill to facilitate verification of the location of AI semiconductors once they are sold. 

Efforts to track US-manufactured chips attracted bipartisan support from members of Congress. The goal was to address rising NVIDIA chip smuggling to China against the provisions of US export control laws.

Focus on Global AI Leadership

NVIDIA and other tech companies argue that retaining Chinese interest in American AI chips is critical to maintaining industry leadership. Doing so would ensure that developers don’t shift to competing offerings such as Huawei completely. 

At the beginning of this month, Huawei open-sourced two of its AI models under the Pangu series on June 30. Tech experts said the decision to make the models available for modification and redistribution will enable Huawei to expand overseas while building its AI ecosystem.

Prior to the April chip export ban, Chinese tech giants like Alibaba, ByteDance, and Tencent increased their H20 chip orders significantly as they deployed DeepSeek AI models as well as their own. Small AI firms have been leveraging DeepSeek AI models to fuel their growth through AI inferencing. Early this year, DeepSeek sparked widespread market selloff that wiped off hundreds of billions off NVIDIA’s market cap.

Before this, NVIDIA had forecasted huge write-offs and foregone billions in sales revenue, a move that underscored China’s impact on its financial outlook. 

Caroline Gray
X

Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as Necessary are stored on your browser as they are essential for enabling the ... Show More

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as Necessary are stored on your browser as they are essential for enabling the basic functionalities of the site.

We also use third-party cookies that help us analyze how you use this website, store your preferences, and provide the content and advertisements that are relevant to you. These cookies will only be stored in your browser with your prior consent.

You can choose to enable or disable some or all of these cookies but disabling some of them may affect your browsing experience.

Show Less

Necessary Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

Functional

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No Cookie to display

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No Cookie to display

Advertisement

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No Cookie to display
Scroll to Top