TradingKey - On Tuesday, July 29, sources disclosed that Nvidia has placed a new order with TSMC for 300,000 H20 chips, indicating a restart of the production line for this specific chip.
The H20 chip was developed for the Chinese market following the 2023 U.S. export restrictions on AI chips. Its computational performance is lower than Nvidia's H100 or the new-generation Blackwell series intended for overseas markets.
This order contradicts earlier media reports suggesting that Nvidia had limited H20 chip stock and no plans to restart production soon.
Sources indicated that due to robust demand from the Chinese market, Nvidia has shifted its previous strategy from merely "clearing inventory" in China to actively meeting market demand.
According to insiders, this new order from TSMC supplements the existing inventory of 600,000 to 700,000 H20 chips. For context, U.S. research firm SemiAnalysis reported that Nvidia is expected to sell one million H20 chips in 2024.
Analysts believe that this additional order will support long-term performance growth and underscores Nvidia's optimism about the future of the GPU market.
Earlier this month, the U.S. government allowed Nvidia to resume sales of H20 chips to China, overturning an April ban on these sales.
Sources further revealed that Nvidia is now requesting potential clients for H20 chips to submit documentation, including order forecasts.
However, it is worth noting that Nvidia still requires an export license from the U.S. government to proceed with shipments. According to Reuters, this approval from the U.S. Commerce Department is still pending. In mid-July, Nvidia stated that U.S. authorities had assured them that the license would be granted soon.