Nvidia has reported a sizable order of likely 300,000 H20 AI chips to Taiwan Semiconductor Manufacturing Company (TSMC) to meet significant demand from major Chinese technology companies. This order is in addition to the 600,000 to 700,000 H20 GPUs already manufactured by Nvidia, reported prior to the reversal of the U.S. government's ban from April 2025 on exporting the chips to China.
The H20 GPU is a special, lower-powered version of Nvidia’s AI chip designed to conform with U.S. export controls limiting China’s access to advanced semiconductor technology. The H20 is not as powerful as both Nvidia’s most advanced H100 or its upcoming Blackwell series, but it is designed for China’s AI market and responds to increased adoption from local companies.
Although Nvidia awaits final export licenses from the U.S. Department of Commerce, the company expects to receive these approvals fairly quickly. According to Nvidia's CEO Jensen Huang, restarting production will depend on demand, but warned that restarting the supply chains would take up to nine months.
Major players in the AI & cloud computing such as Tencent and Alibaba placed orders before the ban on shipping Nvidia’s advanced chips. The H20s are lower-cost chips for Chinese consumers to build and deploy large language models and AI applications quickly.
This major order highlights the rebounding interest in China's AI chip purchase activity on the heels of decreasing export restrictions, and with Nvidia poised to take advantage of this large market, notwithstanding its authorization challenges.. The action also underscores a tenuous relationship between U.S. technology export policy and the Chinese AI ecosystem.
