Nvidia asks suppliers to halt H20 AI chip production amid China's crackdown

Nvidia has asked suppliers to halt H20 AI chip production amid China's crackdown due to security concerns. The company has urged Amkor Technology, Samsung Electronics, and Foxconn to pause production. Nvidia CEO Jensen Huang has denied allegations of having tracking technology or "backdoors" in the H20 chips. The potential loss of H20 chip sales to China could impact Nvidia's sales, but Wall Street remains bullish on the stock based on robust demand for its AI GPUs.

Nvidia has instructed some of its component suppliers to halt production of its H20 AI graphics processing units (GPUs) due to China's ongoing crackdown on the American tech giant. The directive comes after the Chinese government raised concerns about potential security risks associated with the chips [1].

The H20 chips, designed specifically for the Chinese market, have been a significant source of revenue for Nvidia. However, recent regulatory actions by the Chinese government have put these sales at risk. Nvidia has reportedly asked Arizona-based Amkor Technology, which handles the advanced packaging of the H20 chips, and South Korea's Samsung Electronics, which supplies memory for them, to halt production [1].

Nvidia's CEO Jensen Huang has denied allegations of having tracking technology or "backdoors" in the H20 chips, stating that the company has made it clear that such features do not exist. He added that Nvidia is in discussions with the Chinese government to resolve the issue [1].

The potential loss of H20 chip sales to China could impact Nvidia's overall revenue. However, Wall Street analysts remain bullish on the stock due to robust demand for its AI GPUs. Several investment banks have raised their price targets for Nvidia ahead of its highly anticipated quarterly report [3].

Despite the setback in China, Nvidia's strong position in the AI GPU market and the growing demand for computing power to support artificial intelligence are expected to drive the company's revenue growth [3]. Analysts anticipate that Nvidia will beat revenue and earnings expectations in its second quarter, with several firms raising their price targets to reflect the company's strong fundamentals.

References:
[1] https://www.cnbc.com/2025/08/22/nvidia-halt-h20-chip-production-china-cracks-down.html
[2] https://www.investors.com/uncategorized/nvidia-halts-h20-production-beijing-directive-ai-chip/
[3] https://www.morningstar.com/news/marketwatch/20250818256/the-bull-case-for-nvidia-just-got-stronger-according-to-these-wall-street-analysts