HK Movers | Chinese Chip Stocks Jump as Nvidia Said to Ask Suppliers to Halt H20 Work

Chinese chip stocks jumped in Hong Kong. Shanghai Fudan rose 5%; SMIC rose 4%; Hua Hong Semiconductor rose 3%; Solomon Systech and HG Semiconductor rose 2%.

Nvidia Corp. has instructed component suppliers including Samsung Electronics Co. and Amkor Technology Inc. to stop production related to the H20 AI chip, the Information reported, citing unidentified sources.

Nvidia issued those orders this week after Beijing urged local companies to avoid using the H20, the Information said, referring to a chip designed specifically for the Chinese market.

A production suspension would raise questions about fundamental demand for the H20, a less-powerful version of Nvidia’s cutting-edge AI accelerators that competes with capable chips from the likes of Huawei Technologies Co. and Cambricon Technologies Corp.

Nvidia and Advanced Micro Devices Inc. both recently secured Washington’s approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15% cut of the related revenue.

But their Chinese customers are under pressure to adopt homegrown chips instead — part of a broader objective to build a world-class domestic industry and wean the country off US technology.