Nvidia Corporation NVDA has reportedly ordered 300,000 additional H20 AI chips from Taiwan Semiconductor Manufacturing Co. TSM due to unexpectedly strong demand in China.
What Happened: Nvidia placed the new order with TSMC last week, signaling a significant reversal in its production plans for the H20 GPU, reported Reuters, citing two sources.
The move follows the Donald Trump administration’s decision to ease restrictions on H20 exports to China, which were initially imposed in April amid national security concerns.
Nvidia initially halted production of the chip and told customers it had limited inventory.
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Jensen Huang had said any production restart would require strong demand and at least nine months to reactivate the supply chain.
The new orders will supplement Nvidia’s existing stockpile of 600,000–700,000 H20 chips, the report added, citing the unnamed sources.
Why It’s Important: The H20 is a customized AI chip designed to comply with U.S. export controls and serve Nvidia’s Chinese clients without violating trade regulations.
Although less powerful than the company’s flagship H100 or Blackwell chips, the H20 has been widely adopted by major Chinese tech firms, including Tencent Holdings ADR TCEHY, Alibaba Group BABA and ByteDance.
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While some U.S. lawmakers have criticized the resumption of chip exports, Nvidia argues that continued engagement with China helps prevent developers from switching to domestic alternatives like Huawei Technologies.
The U.S. Department of Commerce has yet to issue final export licenses for the H20, but Nvidia has reportedly been assured they are forthcoming. In the meantime, the company has requested updated order forecasts from Chinese customers, the report said.
Meanwhile, last week, it was reported that over $1 billion worth of Nvidia’s advanced AI processors were reportedly smuggled into China, bypassing U.S. government export restrictions.
Price Action: On Monday, Nvidia shares rose 1.87% during regular trading and inched up another 0.23% after hours, closing at $177.15, according to Benzinga Pro.
Benzinga’s Edge Stock Rankings indicate that NVDA continues to exhibit strong momentum across short, medium and long-term timeframes. However, despite its solid performance, the stock’s value score remains comparatively low. More detailed performance insights are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.