Nvidia to halt work on China-focused H20 AI chip - report

[Nvidia World Headquarters]
wellesenterprises

Nvidia (NASDAQ:NVDA [https://seekingalpha.com/symbol/NVDA]) told some of its suppliers to suspend the production of its H20 AI chip, which was specifically designed for the Chinese market, according to a report by _The Information._

This directive affects major component companies, including Amkor Technology (AMKR [https://seekingalpha.com/symbol/AMKR]), responsible for the chip’s advanced packaging, and Samsung Electronics (OTCPK:SSNLF [https://seekingalpha.com/symbol/SSNLF]), which supplies high-bandwidth memory for these chips.

Additionally, Foxconn (OTCPK:FXCOF [https://seekingalpha.com/symbol/FXCOF]), involved with backend processing, was also requested to pause related work.

"We constantly manage our supply chain to address market conditions." an Nvidia (NASDAQ:NVDA [https://seekingalpha.com/symbol/NVDA]) spokesperson said in a statement. "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," it said.

The move comes after increasing scrutiny and pressure from Chinese regulators. The Chinese authorities advised major technology companies—including Tencent (OTCPK:TCEHY [https://seekingalpha.com/symbol/TCEHY]) (OTCPK:TCTZF [https://seekingalpha.com/symbol/TCTZF]), ByteDance (BDNCE [https://seekingalpha.com/symbol/BDNCE]), and Alibaba (BABA [https://seekingalpha.com/symbol/BABA])—to suspend their orders of the H20 chip, citing security risks.

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