Nvidia Orders 300,000 H20 Chips from TSMC Amid Rising China Demand

Nvidia has placed a fresh order for 300,000 H20 GPUs with Taiwan-based chip manufacturer TSMC, driven by a sharp increase in demand from China. According to two sources familiar with the matter, the surge in interest from Chinese firms has prompted Nvidia to move beyond its existing stockpile and resume chip procurement.

The H20 chip was developed specifically for the Chinese market after U.S. restrictions in late 2023 limited the export of Nvidia’s more advanced AI chips. Although the H20 lacks the high-end computing power of the H100 and the Blackwell series, it remains a sought-after product due to its compatibility with Nvidia’s AI software tools.

Earlier this month, the U.S. government under the Trump administration permitted Nvidia to resume H20 sales to China, reversing an earlier ban from April. That ban had been introduced as part of broader efforts to limit China’s access to advanced AI technologies over national security concerns.

Sources suggest that Nvidia already holds an inventory of 600,000 to 700,000 H20 chips and sold approximately one million units in 2024. Despite this, the new order indicates the company’s willingness to meet the renewed demand.

During his recent visit to Beijing, Nvidia CEO Jensen Huang stated that production could only restart if sufficient orders were received, warning that any resumption would take at least nine months. Reports later claimed that Nvidia was low on H20 stock and had no immediate plans to restart wafer production, until now.

However, before any new shipments can proceed, Nvidia still requires export licenses from the U.S. government. Although the company has been assured that approvals are forthcoming, the U.S. Department of Commerce has yet to issue them.

Meanwhile, Nvidia has asked Chinese buyers to submit updated order details and forecast data.

The H20 chip has become a focal point in the ongoing U.S.-China tech conflict. While critics in Washington see the resumed sales as a risk to America’s AI leadership, Nvidia and others argue that maintaining a presence in China is key to preventing a full switch to domestic alternatives like those from Huawei.

Source: The Economic Times