Nvidia asked suppliers to halt production of its H20 chips

Nvidia told several of its suppliers to halt work on its H20 processors made specifically for China, following growing pressure from Beijing.

The move comes after Chinese regulators told domestic technology firms to stop purchasing the U.S. company’s chips over national security concerns, according to reports published Friday.

The company has reportedly instructed Amkor Technology, based in Arizona, to suspend its advanced packaging work on the H20 chips. Samsung Electronics in South Korea, which supplies memory for the processors, has also been asked to pause its part of the production. A separate account from Reuters said Taiwan’s Foxconn was told to stop related work as well.

It is now uncertain if H20 chips will be back in China

The development brings fresh uncertainty about whether Nvidia’s H20 chips will make their way back into the Chinese market. Earlier this year, Washington announced it would grant export licenses for shipments to China, after a previous restriction in April had blocked them.

Last month, China’s Cyberspace Administration called Nvidia in for discussions over risks of national security tied to the H20 processor. Regulators asked Nvidia to provide more details on how the chips function.

Beijing has voiced fears that the H20 chips could contain hidden tracking tools or features that might allow outside control, as reported earlier by Cryptopolitan. In May, U.S. lawmakers introduced the Chip Security Act, which would require firms such as Nvidia to include security and location protections in advanced AI processors.

Speaking in Taiwan, Nvidia Chief Executive Jensen Huang said on Friday that the Chinese side had raised questions about possible security “backdoors.” He emphasized that the company made clear that no such features exist.

He added that Nvidia had been caught off guard by the inquiries but was working to satisfy regulators. Huang said he had made efforts to help secure licenses for the H20 and hoped the matter could be settled soon.

Nvidia clarified that the H20 was safe for use

The company noted that both Washington and Beijing understand the chip is not intended for military or government infrastructure. Nvidia added that, just as the U.S. government does not rely on Chinese chips, China would not use American processors for state functions. However, it said commercial use of such chips benefits both economies.

Huang had previously called it a victory when the United States government agreed to let the company sell the H20 in China. The company has lobbied against Washington’s limits on chip exports, which have reduced its business in one of its biggest markets.

During his remarks on Friday, Huang also mentioned discussions with the United States President Trump about the company’s overseas operations. He said he highlighted the importance of maintaining America’s lead in AI technology and argued that global AI development would advance regardless, so U.S. firms should maximize exports during this key moment for the industry.

Nvidia recorded a $4.5 billion write-down in May due to unsold H20 stock, following the export restrictions. The company also reported that its revenue for the last quarter would be higher by $2.5 billion without those curbs.

Industry experts warn that the current scrutiny in China could further complicate the company’s prospects. Bernstein analyst Qingyuan Lin told CNBC that a full ban on H20 sales in China could put more than $20 billion of Nvidia’s annual revenue at risk. He said the company might still generate sales from less advanced chips until 2026, but by 2027, local competitors would likely meet much of the demand themselves.

Analysts also believe Beijing’s measures reflect its push for self-reliance in semiconductors, a response to Washington’s efforts to maintain U.S. dominance in artificial intelligence hardware.

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