Nvidia (NVDA) Stock: H200 Chip Suppliers Halt Production After China Customs Block

TLDR

• Chinese customs officials blocked Nvidia H200 chip shipments from entering China, causing parts suppliers to halt production
• Nvidia expected over 1 million H200 orders from Chinese clients with shipments planned as early as March
• Suppliers had been working around the clock to prepare for delivery before the sudden customs block
• U.S. memory shortage may further limit export licenses for H200 chips to China under new Commerce Department rules
• Chinese government summoned tech firms to warn against buying the chips unless necessary

Suppliers making parts for Nvidia’s H200 artificial intelligence chips have stopped production. The shutdown came after Chinese customs officials blocked the newly approved processors from entering the country.

NVIDIA Corporation, NVDA

Two sources with knowledge of the situation confirmed the production halt. Nvidia has not yet commented on the matter.

The timing creates problems for Nvidia’s expansion plans. The company expected more than 1 million orders from Chinese clients for the H200 chips.

Suppliers were running 24/7 operations to meet demand. They aimed to start shipping as early as March.

Chinese customs authorities told agents this week that H200 chips cannot enter the country. Officials provided no explanation for the directive.

Government representatives also contacted domestic tech companies. They warned these firms against purchasing the chips unless absolutely necessary.

The H200 represents Nvidia’s second most powerful AI chip. Strong demand exists among Chinese firms despite the uncertain regulatory environment.

Memory Supply Concerns Add Pressure

A new challenge emerged from U.S. regulators regarding memory supplies. Representative John Moolenaar, the top Republican on the House China committee, raised concerns about DRAM shortages.

New Commerce Department rules require exporters to verify that China shipments won’t worsen U.S. market shortages. Memory constraints create an immediate obstacle for H200 exports.

Moolenaar wrote to Commerce Secretary Howard Lutnick about the issue. He noted that chips with HBM3E memory heading to China represent lost opportunities for American customers during severe supply constraints.

Regulatory Uncertainty Continues

Authorities have not clarified whether the customs block represents a formal ban or temporary measure. The lack of transparency leaves companies guessing about next steps.

Some analysts believe Beijing may want domestic chip companies to gain market share. Others suggest the restrictions could serve as negotiating leverage with Washington.

The H200 has become a major friction point in U.S.-China relations. Both countries continue maneuvering around AI chip technology and trade.

Nvidia responded to the memory supply concerns through a spokesperson. The company stated it regularly manages its supply chain and can fulfill all approved H200 orders without affecting other products or customers.

Chinese tech firms now face a difficult choice. They must decide whether to wait for potential policy changes or seek alternative chip solutions.

The production halt at supplier facilities marks the most tangible impact yet. Workers who were preparing for high-volume shipments now sit idle.

Nvidia had positioned the H200 as a key product for the Chinese market. The chip offered performance capabilities that Chinese AI companies needed for their applications.

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