The U.S. government has restricted the export of Nvidia's H20 chip to China. This is seen as an increase in pressure from the Trump administration, which has been ramping up its semiconductor hegemony competition against China, in addition to tariffs. Companies like SK hynix, which supply high-bandwidth memory (HBM) for the H20, are also expected to be inevitably impacted.
Nvidia announced on the 15th (local time) that it received notice from the U.S. government on the 9th that authorization from authorities is required for exporting the H20 chip to China. Additionally, they reported that on the 14th, they were notified that this regulation will be applied indefinitely. Nvidia explained that the U.S. government cited concerns regarding the use of the H20 chip in China's supercomputers as the basis for the new regulation.
The H20 is a premium specification AI chip that can be legally provided to China, exempt from the U.S. regulations on exports of advanced semiconductors for national security reasons. In particular, the Chinese AI startup DeepSeek gained attention when it introduced a low-cost superior AI model last January. The H20 is known to be one of the chips used by DeepSeek for training its AI models.
Due to this export restriction measure, Nvidia expects to incur an expense of $5.5 billion (7 trillion 856.7 billion won) in the first quarter of the fiscal year (February to April). This amount accounts for costs Nvidia will have to pay related to inventory, purchase agreements, and provisions.
IT specialized media Decryption reported that Chinese tech giants like Alibaba, Tencent, and ByteDance ordered over $16 billion (22 trillion 800 billion won) worth of H20 chips from January to March of this year. This represents an increase of over 40% compared to the previous quarter, fueled by a surge in orders ahead of the export regulations on the H20 chip. Nvidia's multibillion-won expenses are estimated to have resulted from their inability to fulfill such enormous order volumes.
An industry source commented, "Domestic memory semiconductor corporations like SK hynix, which supplied HBM for the H20, will inevitably face a reduction in the volume they can supply in the long term due to this action."