Nvidia Faces Supply Issues in China Amid Pent-Up Demand for H20 GPUs

Nvidia is expected to face supply issues in China as it prepares to meet a pent-up demand for its H20 graphics processing units, or GPUs, after a weeks-long ban in the country. The AI chip giant is readying to meet demand, but supply constraints may impact its ability to do so.

Nvidia is set to resume sales of its H20 graphics processing units (GPUs) in China, following a weeks-long ban due to U.S. export restrictions. The company, however, is expected to face significant supply issues as it prepares to meet pent-up demand. The H20 GPU was previously banned by the Trump administration in April due to national security concerns, but recent thawing of relations between Washington and Beijing has led to broader approval of crucial technologies, including advanced semiconductors [1].

Nvidia has applied for export licenses to restart shipments, with assurances from the U.S. government that these licenses will be approved. The company's CEO, Jensen Huang, met with U.S. President Donald Trump to discuss the company's operations in China [2]. The restart of H20 GPU shipments to China marks a significant step forward for Nvidia, allowing it to reenter a crucial market that made up 13% of its sales in 2024 [4].

Despite the positive developments, Nvidia is expected to face supply constraints in China due to pent-up demand for its H20 GPUs. The company has been working to meet this demand, but supply issues are anticipated. Nvidia has introduced a new model, the RTX Pro GPU, tailored to meet regulatory rules in the Chinese market [2]. Additionally, the company has been actively engaging with Chinese and American officials to promote collaboration on AI research and ensure its operations in both markets [5].

The supply constraints are expected to impact Nvidia's ability to meet the high demand for advanced AI and graphics processing units in China. The company is preparing to navigate these challenges while reentering the Chinese market, which could potentially boost its revenue and market share.

References:
[1] https://www.reuters.com/world/china/nvidias-china-restart-faces-production-obstacles-information-reports-2025-07-19/
[2] https://www.ainvest.com/news/nvidia-seeks-export-licenses-china-resumes-h20-gpu-shipments-2507-53/
[3] https://www.fxleaders.com/news/2025/07/15/nvidia-u-s-clears-nvidia-to-resume-h20-gpu-sales-to-china/
[4] https://www.cnn.com/2025/07/15/business/nvidia-resume-h20-chip-sales-to-china-intl-hnk
[5] https://www.cnbc.com/2025/07/15/nvidia-says-us-government-will-allow-it-to-resume-h20-ai-chip-sales-to-china.html