SANTA CLARA, CA – Nvidia is facing significant production obstacles in its plan to resume selling its most powerful permissible AI chip to China, according to a report from The Information published on Saturday. The company has reportedly informed its Chinese customers of limited supplies for the H20 chip, casting uncertainty on the recently announced relaunch.
The issue stems from a U.S. government ban in April that temporarily halted sales of the H20 chip. According to the tech publication's report, which cited two people with knowledge of the matter, the ban forced Nvidia to cancel its customer orders and relinquish the manufacturing capacity it had booked with chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC).
TSMC has since repurposed those production lines to manufacture chips for other clients.
The challenge of restarting production was highlighted by Nvidia CEO Jensen Huang at a media event in Beijing this week. According to the report, Huang stated that manufacturing new H20 chips "from scratch" could take as long as nine months. This timeline contrasts with more recent optimistic comments from the CEO suggesting that supply would be ramped up and that export licenses for Chinese orders would be approved swiftly.
Adding to the uncertainty, The Information's report also claimed, without citing a source, that Nvidia did not plan to restart production of the H20.
Nvidia declined to comment on the report. Reuters was not able to immediately verify the claims.
The situation underscores the complex landscape Nvidia is navigating. While facing these production hurdles for the H20, Nvidia has also announced the development of a new chip specifically for its Chinese clients, the RTX Pro GPU, which is designed to comply with U.S. export restrictions.
