NVIDIA Halts Production of Most Powerful AI Chips for China
NVIDIA, the world's most valuable semiconductor company, has informed Chinese customers that it will no longer produce its most powerful AI chip currently permitted for export to China under U.S. trade restrictions, the H20 GPU, according to a report by The Information.
The decision comes despite a historic rally in NVIDIA's stock this year, driven by explosive demand for artificial intelligence hardware.
The company attributed the production halt to tightening U.S. export controls and redirected manufacturing capacity at Taiwan Semiconductor Manufacturing Company (TSMC), its key foundry partner.
The H20 chip, part of NVIDIA's 'watered-down' lineup developed specifically to comply with U.S. export restrictions, had become the most advanced GPU still legally available in China. But in April, the U.S. government imposed further limits, effectively banning the sale of even these restricted chips. This forced NVIDIA to cancel customer orders and relinquish reserved production slots at TSMC.
Although NVIDIA publicly stated this week it plans to resume sales of the H20, sources familiar with the matter told The Information that there are no plans to restart production, signaling deeper uncertainty about the company's China strategy.
Speaking at a press event in Beijing earlier this week, NVIDIA CEO Jensen Huang said TSMC had already repurposed its H20 production lines to serve other clients. 'Starting production from scratch could take as long as nine months,' he noted.
To maintain its presence in the Chinese market, NVIDIA is reportedly developing a new graphics processing unit (GPU), RTX Pro, that would comply with the latest export restrictions. However, the development timeline and regulatory approval remain unclear.
Huang also indicated that export licenses for China-bound products would be reviewed more quickly moving forward, in an effort to maintain supply amid rising demand.
As of the latest market data, NVIDIA's stock (ticker NVDA) is trading at $172.41 USD, down slightly by $0.67 (approximately ‑0.38%) over the past day
Today's range: $171.28 – $174.22
Previous close: $173.00
Market cap: ~$4.2 trillion, with over 60 analysts rating it a 'Strong Buy' and a 12-month price target averaging $179.55, suggesting modest upside. The stock climbed more than 1500% since the past five years.
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