NVIDIA Asks Suppliers to Halt H20 Work

NVIDIA Corp. has instructed component suppliers, including Samsung Electronics Co. and Amkor Technology Inc., to stop production related to its H20 AI chip, The Information reported, citing unidentified sources, Debby Wu reported for Bloomberg News.

A production suspension raises questions about demand for the H20, a scaled-down version of NVIDIA’s top AI accelerators. (Photo: Nvidia)

NVIDIA issued the orders this week after Beijing urged local companies to avoid using the H20, a chip designed specifically for the Chinese market, according to The Information.

NVIDIA’s shares fell about 1.9% on alternative trading system Blue Ocean during the Asia morning, said Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities, Nick Turner, Yoolim Lee, and Abhishek Vishnoi also reported for Bloomberg News.

A production suspension raises questions about demand for the H20, a scaled-down version of NVIDIA’s top AI accelerators, which competes with chips from Huawei Technologies Co. and Cambricon Technologies Corp.

Cambricon’s shares surged as much as 10% Friday, while other Chinese chip stocks also rallied.

During a July 15 appearance on CNBC, Cantor Fitzgerald CEO Howard Lutnick downplayed the Biden administration’s earlier decision to ease export controls that would have blocked H20 sales.

“We don’t sell them our best stuff, not our second-best stuff, not even our third-best,” Lutnick said at the time. China viewed the remark as an insult and banned purchases of the H20.

Chinese firms are now under pressure to switch to domestic alternatives, part of a broader strategy to build a world-class semiconductor industry and reduce reliance on U.S. technology.

Authorities have reportedly sent notices warning companies against using the less-advanced H20 chips, citing alleged security risks.