China's H3C warns of Nvidia AI chip shortage amid surging demand
One of China's largest server makers, H3C, has flagged potential shortages of Nvidia's H20 chip, the most advanced AI processor legally available domestically under U.S. export controls, in a client notice seen by Reuters.
The potential supply crunch could create obstacles for China's artificial intelligence ambitions at a time when its tech firms are aggressively expanding their investments in AI.
"H20's international supply chain faces significant uncertainties," the company said in Tuesday's notice, adding that current inventory was nearly depleted.
Geopolitical tension that is roiling global trade and supply of key materials was responsible for the uncertainty, it added, saying new shipments were expected by mid-April this year.
H3C and Nvidia did not immediately respond to Reuters' requests for comment.
Demand for H20 chips has surged in recent months as companies rush to adopt Chinese AI startup DeepSeek's cost-effective AI models.
Tencent, Alibaba and ByteDance have significantly increased orders of the H20 since the Chinese AI startup burst into the global public consciousness since January, Reuters reported last month.
The Chinese server maker said supply plans beyond April 20 also face uncertainties from raw material policy changes, shipping disruptions, and production challenges.
In the notice, H3C said it would distribute incoming H20 chips on the basis of a profit-first principle, prioritising stable, long-term customers with higher profit margins on their orders.
H20 processors are currently scarce in the Chinese market, said an industry source, who distributes AI servers including those that make use of H20 chips.
"We were told the chips would be available, but when it came time to actually purchase them, we were informed they had already been sold at higher prices," added the source, who sought anonymity given the information is private.
U.S. officials were considering curbs on sales of H20 chips to China, Reuters reported in January.
H3C is a major OEM partner for Nvidia's AI chips in China, alongside others such as Inspur, Lenovo and Huawei's spin-off x86 server unit, xFusion.
The primary chip Nvidia is legally permitted to sell in China, the H20 was launched after the latest round of U.S. export restrictions took effect in October 2023.
Washington has banned exports of Nvidia's most advanced chips to China since 2022, concerned that its rival could use advanced technologies to build up its military capabilities.
Analysts estimate Nvidia shipped about 1 million H20 units in 2024, generating revenue of more than $12 billion for the company.
Huawei and Cambricon offer domestic alternatives to the H20.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Etihad
3 hours ago
- Al Etihad
China vice premier to meet US delegation for trade talks: Beijing
7 June 2025 23:12 Beijing (AFP)Chinese Vice Premier He Lifeng will meet a US delegation for talks next week in Britain, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two will visit the United Kingdom from June 8 to 13 at the invitation of the British government, China's foreign ministry said in a said He and American representatives will co-chair the first meeting of the China-US economic and trade consultation President Donald Trump had already announced on Friday that a new round of trade talks with China would kick off in London beginning Monday, after he spoke by phone with Chinese counterpart Xi Jinping in a bid to end a bitter battle over posted on his Truth Social platform that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer would meet the Chinese discussions will mark the second round of such negotiations between the world's two biggest economies since Trump launched his trade war shortly after returning to the White House in January.A first meeting, held in mid-May in Geneva, brought a pause to the US-China trade Thursday the Republican president finally discussed the issues with Xi for the first time since the trade tensions soared, assuring that the conversation had been positive. Xi for his part told Trump the two should "correct the course" of bilateral relations, according to remarks quoted by official Chinese media.
Gulf Today
8 hours ago
- Gulf Today
Etihad Cargo, Ezhou Huahu Airport sign deal
Etihad Cargo, the cargo and logistics arm of Etihad Airways, has signed a strategic cooperation agreement with Ezhou Huahu Airport during Air Cargo Europe 2025, reinforcing the carrier's commitment to expanding access across Asia-Pacific and unlocking greater trade potential between China and global markets. The agreement was signed by Stanislas Brun, Chief Cargo Officer at Etihad Airways, Luo Guowei, Party Committee Member and Deputy General Manager of Hubei Airport Group Company and Chairman of Hubei International Logistics Airport Company, and Li Wei, Deputy General Manager of Hubei International Logistics Airport Company. The signing took place at the Etihad Cargo stand and marks the start of a long-term collaboration between the two organisations. As part of the agreement, Etihad Cargo will strengthen its strategic presence at Ezhou Huahu Airport, which will serve as a key gateway within its broader China network. This complements the carrier's ongoing operations in Shanghai (PVG) and Shenzhen (SZX), ensuring nationwide access and greater flexibility for customers. 'Ezhou Huahu Airport is already recognised across China for its outstanding capabilities and world-class logistics infrastructure,' said Stanislas Brun, Chief Cargo Officer at Etihad Airways. 'This partnership will amplify Ezhou Huahu Airport's strengths across Europe, the Middle East and Africa. It represents an exciting opportunity to accelerate the development of more connected, efficient logistics solutions and those not yet engaging with this corridor risk being left behind.' The partnership will focus on increasing flight frequencies, opening new routes and building joint solutions for cross-border e-commerce, cold chain logistics and high-value manufacturing. The integration of Ezhou's hub warehouse with Etihad Cargo's global network will create a seamless two-way trade channel, strengthening market access for Chinese exports while enhancing inbound logistics flows.
Al Etihad
9 hours ago
- Al Etihad
Trump says he has no plans to speak to Musk as feud persists
7 June 2025 17:15 WASHINGTON (Reuters)US President Donald Trump said on Friday that he has no plans to speak with Elon Musk, signaling the president and his former ally might not resolve their feud over a sweeping tax-cut bill any time reporters aboard Air Force One, Trump said he wasn't "thinking about" the Tesla CEO."I hope he does well with Tesla," Trump Trump said a review of Musk's extensive contracts with the federal government was in order. "We'll take look at everything," the president said. "It's a lot of money."Trump may get rid of the red Tesla Model S that he bought in March after showcasing Musk's electric cars on the White House lawn, a White House official said, speaking on condition of for his part, did not directly address Trump but kept up his criticism of the massive Republican tax and spending bill that contains much of Trump's domestic his social-media platform X, Musk amplified remarks made by others that Trump's "big beautiful bill" would hurt Republicans politically and add to the nation's $36.2 trillion debt. He replied "exactly" to a post by another X user that said Musk had criticized Congress and Trump had responded by criticizing Musk also declared it was time for a new political party in the United States "to represent the 80% in the middle!"People who have spoken to Musk said his anger has begun to recede and they think he will want to repair his relationship with Trump, according to one person who has spoken to Musk's White House statements came one day after the two men battled openly in an extraordinary display of hostilities that marked a stark end to a close stock rose on Friday, clawing back some losses from Thursday's session, when it dropped 14% and lost $150 billion in value, the largest single-day decline in the company's the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign. Trump named Musk to head a controversial effort to downsize the federal workforce and slash feted Musk at the White House a week ago as he wrapped up his role as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal then, Musk has denounced Trump's tax-cut and spending bill as a "disgusting abomination." His opposition is complicating efforts to pass the bill in Congress where Republicans hold a slim bill narrowly passed the House of Representatives last month and is now before the Senate, where Republicans say they will make further analysts say the measure would add $2.4 trillion in debt over 10 Speaker Mike Johnson said he has been texting with Musk and hopes the dispute is resolved quickly. 'VERY DISAPPOINTED'Trump had initially stayed quiet while Musk campaigned to torpedo the bill, but broke his silence on Thursday, telling reporters he was "very disappointed" in Musk. Trump suggested he would terminate government contracts with Musk's businesses, which include rocket company SpaceX and its satellite unit Starlink. The billionaire then threatened to decommission SpaceX's Dragon spacecraft, the only US spacecraft capable of sending astronauts to the International Space Station. Musk later backed off that threat.
