Nvidia Buys 300,000 H20 Chips From TSMC After Ban Is Revoked, Demand From China Explodes

JAKARTA Nvidia reportedly ordered 300,000 H20 chipsets from Taiwanese semiconductor manufacturer TSMC last week. Two sources familiar with this said that strong demand from China led Nvidia to change its original plans that only wanted to rely on old stocks.

This move comes after the administration of US President Donald Trump lifted the ban on selling H20 to China imposed in April 2025. Previously, the ban was designed to prevent state-of-the-art AI chips from falling into China for national security reasons.

The H20 chip itself was specially developed by Nvidia for the Chinese market in response to US-imposed export restrictions on flagship AI chips such as H100 and Blackwell by the end of 2023. Although its computing power is lower, H20 is still in demand because it is compatible with Nvidia software.

This new order will add to Nvidia's H20 chip stock which is currently in the range of 600,000 to 700,000 units. In comparison, during 2024, Nvidia has sold around 1 million units of H20 chip, according to data from the US-based research institute SemiAnalysis.

Nvidia CEO Jensen Huang, during his visit to Beijing this month, said that the number of H20 orders would determine whether the chip production would restart. He added that the supply chain took about nine months to get back on track in full.

But until now, Nvidia is still waiting for export license approval from the US government to send the chip. In mid-July, Nvidia said it had received assurances from authorities that the license would be issued soon, but the US Department of Commerce had not yet made an official decision.

Nvidia declined to comment on the latest orders or export license status. The TSMC and the US Department of Commerce also did not provide a response to a request for comment from Reuters.

As part of export preparations, Nvidia also asked Chinese companies looking to buy H20 chips to submit new documents, including projected volume orders from their clients, said two other sources.

The Trump administration said the decision to lift the H20 sales ban was part of negotiations with China regarding the export of rare earth magnets important components in various industries that were previously limited to exports by Beijing.

The decision drew bipartisan criticism from US legislators concerned that China's access to the H20 chip could hinder US efforts to maintain dominance in the AI technology sector. However, according to Nvidia, maintaining China's interest in their products is essential so that developers there do not completely switch to local alternatives such as Huawei.

Prior to the ban in April 2025, Chinese tech giants such as Tencent, ByteDance, and Alibaba had significantly increased H20 chip orders. They use the chip to support self-made AI models and efficient AI models from DeepSek.

The high interest in Nvidia chips is also reflected in the increasing demand for improvement of Nvidia's old chips that have been banned, many of which have entered China illegally.

Nvidia had warned that April's ban could cost companies huge losses. They estimate the potential inventory loss to reach 5.5 billion US dollars (approximately Rp90.2 trillion) and lose a potential sale of 15 billion US dollars (approximately Rp246 trillion), Jensen Huang said in the Stratechery podcast.