Nvidia Halts H20 Chip Amid China's Usage Ban

 

Nvidia has asked suppliers, including Samsung Electronics and Amkor Technology, to halt production of its H20 AI chip, following reports that Chinese authorities advised domestic firms not to use it.

The move comes just weeks after Nvidia and AMD received approval from the US government to resume sales of lower-end AI chips in China under a revenue-sharing arrangement, where 15 percent of related revenue must be shared with Washington. China’s directive underscores a critical challenge in its semiconductor strategy: while the country consumes nearly 60 percent of global semiconductors, it produces only 13 percent domestically.

Key Highlights

• Nvidia halts H20 AI chip after China urges firms to avoid it
• China consumes 60 percent of chips but makes just 13 percent domestically
• US-China tensions show fragile compromises in tech trade

The gap leaves China dependent on Nvidia’s CUDA ecosystem and hardware, even as Beijing pushes for self-sufficiency under its Made in China 2025 plan, which targets 70 percent local production in high-tech sectors by 2025.

The halt highlights how geopolitical tensions can quickly disrupt global supply chains. While Washington’s revenue-sharing deal sought to balance national security with continued sales, it drew criticism from US lawmakers who argued it weakened America’s competitive edge. Beijing’s subsequent push for local alternatives suggests the compromise failed to address deeper mistrust.

Also Read: Nvidia Denies Backdoor Claims as China Raises Security Concerns

The rapid reversal—from export approval to production halt within weeks—illustrates the fragility of such middle-ground solutions. Analysts suggest that in high-stakes tech competition, binary approaches of outright bans or open trade may prove more stable than complex arrangements vulnerable to political shifts.