TAIPEI (Taiwan News) — Nvidia has placed a 300,000-unit order for its H20 chips with TSMC, marking a supply restart driven by renewed demand from Chinese tech firms, Reuters reported Tuesday.
The move comes just weeks after the Trump administration allowed Nvidia to resume sales of H20 GPUs to China, reversing an earlier ban tied to national security concerns. One source said demand from Chinese customers prompted Nvidia to move beyond its existing inventory and restart chip procurement.
Developed to comply with US export restrictions, the H20 was tailored for the Chinese market after tighter controls were introduced in late 2023. Though less powerful than Nvidia’s H100 or Blackwell chips, it remains critical to maintaining the company’s foothold in China’s AI sector.
Nvidia had previously stockpiled 600,000 to 700,000 H20 chips, according to sources, and sold about 1 million units this year, research firm SemiAnalysis estimated. Nvidia CEO Jensen Huang (黃仁勳) said in Beijing earlier this month that the company would consider restarting production based on order volume, noting any ramp-up would take nine months.
Despite assurances from US officials, Nvidia is still awaiting export license approvals, according to two sources familiar with the matter. The company has asked Chinese customers to submit new purchase documents, including demand forecasts, to support the licensing process.
The renewed H20 sales are part of broader US-China negotiations over rare earth magnet exports. However, the decision has drawn bipartisan criticism in Washington, with lawmakers warning that access to even downgraded US AI chips could undermine national security goals.
Nvidia and other US tech firms argue that maintaining a presence in China helps preserve software compatibility and counters growing competition from domestic rivals like Huawei. Before the April suspension, Chinese tech giants including Tencent and Alibaba had ramped up H20 orders to support models like DeepSeek and in-house systems.
Even after the ban, demand for Nvidia chips remained strong on China’s gray market, with smuggling and repair activity increasing for its more advanced GPUs. Nvidia previously warned it could be forced to write off NT$163 million (US$5.5 billion) in inventory and miss out on NT$445 billion in potential revenue due to the export halt.
Nvidia and TSMC declined to comment on the reported order, and the US Commerce Department did not respond to inquiries.
