Nvidia halts China H20 chip production after Beijing backlash | Latest Tech News
Nvidia has slammed the brakes on production of its controversial H20 AI chip after Beijing urged Chinese companies to dump the US {hardware} on alleged security dangers — a transfer that rattled traders and despatched shockwaves through the global chip industry.
The chip giant ordered suppliers Samsung Electronics and Amkor Technology to halt manufacturing this week following China’s crackdown on the scaled-down processor designed for its market, according to The Information.
Nvidia shares slipped 1.1% in early trading Friday as Wall Street digested the latest blow to its China business, which pulled in $17 billion last yr.
The freeze raises contemporary doubts about demand for the H20, a watered-down model of Nvidia’s flagship accelerators created to skirt US export bans while still tapping China’s profitable market.
Nvidia, led by CEO Jensen Huang, has halted production of its H20 AI chip after Beijing urged Chinese companies to abandon American technology. AFP via Getty Images
Rivals Huawei Technologies and Cambricon Technologies are now poised to seize ground. Cambricon’s stock soared 20% Friday, fueling a rally among home chipmakers.
The timing couldn’t be worse for Nvidia, which already wrote off $5.5 billion in H20 stock after the Trump administration initially banned the product.
In latest weeks, Chinese regulators have warned companies against utilizing American chips, citing alleged security dangers. Nvidia CEO Jensen Huang, caught off guard by the transfer, insisted the H20 incorporates no backdoors.
“We’re in dialogue with them but it’s too soon to know,” he told reporters during an impromptu airport briefing in Taiwan, where he was assembly with TSMC about his upcoming Rubin chip.
Workers at a Chinese semiconductor plant as Beijing ramps up efforts to construct a home chip industry. VCG via Getty Images
Both Nvidia and rival AMD lately gained approval from Washington to resume restricted AI chip gross sales to China under controversial phrases requiring them to hand over 15% of associated income to the US authorities.
But Beijing is accelerating a push to wean itself off American tech.
That push gained momentum Thursday when Chinese AI phenom DeepSeek said its latest model was constructed to run on next-generation homegrown chips, though it gave no particulars.
Nvidia stock slipped 1.1% Friday as Wall Street reacted to the company’s China setback. AFP via Getty Images
Meanwhile, semi-finished Nvidia chips are “piling up” at Amkor, The Information reported.
The company acknowledged it still holds large H20 stockpiles but said market situations stay “highly uncertain.”
“We constantly manage our supply chain to address market conditions,” an Nvidia spokesperson told Bloomberg, including the H20 was designed strictly for industrial use.
“As both governments recognize, the H20 is not a military product or for government infrastructure.”
Nvidia hopes to roll out a successor to the H20, but Huang cautioned any launch hinges on approval from the incoming Trump administration.
“Offering a new product to China for AI data centers — the follow-on to the H20 — that’s not our decision to make,” he said.
Bloomberg Intelligence analysts said the halt creates “fresh uncertainty” over when Nvidia’s China business can get well, though they anticipate strong US demand to soften the blow.
An indication for Chinese AI startup DeepSeek, which announced its latest model was constructed to run on homegrown chips. REUTERS
Nvidia stories earnings next week, giving traders their first detailed look at how escalating commerce tensions are hitting the world’s most useful chipmaker.
“We constantly manage our supply chain to address market conditions,” an Nvidia spokesperson told The Post.
“As both governments recognize, the H20 is not a military product or for government infrastructure. China won’t rely on American chips for government operations, just like the U.S. government would not rely on chips from China. However, allowing U.S. chips for beneficial commercial business use is good for everyone.”
The Nvidia rep added that “cybersecurity is critically important to us. NVIDIA does not have ‘backdoors’ in our chips that would give anyone a remote way to access or control them. The market can use the H20 with confidence.”
The Post has sought remark from Samsung, Amkor, TSMC, Huawei, Cambricon, DeepSeek and the Chinese authorities.
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