NVIDIA Halts H20 Chip Production Amid Security Concerns in China Amid Uncertainty About New B30A Chip.

NVIDIA has halted production of its H20 AI chip in China due to security concerns raised by the Chinese government. The company's strategy in China remains uncertain, and it is negotiating with US authorities for export licenses for a new chip, the B30A. The B30A is intended for AI data centers in China and is more powerful than the H20, but operates at half the speed of NVIDIA's top-tier B300 chips.

NVIDIA has announced a halt in production of its H20 AI chip in China due to security concerns raised by the Chinese government. The decision comes weeks after Beijing directed local tech companies to stop purchasing the chips, citing alleged security risks [1]. NVIDIA has asked suppliers such as Amkor Technology and Samsung Electronics to suspend production of the H20 chips, which are specifically designed for the Chinese market [2].

The Chinese government has expressed concerns about potential tracking technology or "backdoors" in the H20 chips, which could allow them to be operated remotely. NVIDIA has maintained that its products do not contain such vulnerabilities [3]. Despite these assurances, the company faces ongoing scrutiny from Beijing.

NVIDIA CEO Jensen Huang has been actively engaging with Chinese officials to address these concerns. The company is reportedly working on a new chip, dubbed the B30A, which is more advanced than the H20 and intended for AI data centers in China [2]. Huang has stated that he is in "dialogue" with the U.S. government about offering this new product to China [3].

The B30A is expected to be more powerful than the H20 but operates at half the speed of NVIDIA's top-tier B300 chips. The new chip is designed to address the U.S. government's concerns about the potential use of advanced American chips in Chinese military applications [3].

NVIDIA's position in China has been a source of contention for the company. In July, the U.S. government approved the export of the H20 chip to China, but the company has since faced new roadblocks due to security concerns raised by Chinese authorities [3]. The company has taken a $4.5 billion writedown on its unsold H20 inventory and has seen its sales in China at risk [1].

Analysts have noted that if China completely bans the H20 chips, it could put NVIDIA's over $20 billion of annual sales in the country at risk. However, assuming the company is still allowed to sell less advanced chips, it should be able to capture some revenue in 2026, but demand will be further limited in 2027 as local supply capabilities ramp up [1].

References:
[1] https://www.cnbc.com/2025/08/22/nvidia-halt-h20-chip-production-china-cracks-down.html
[2] https://www.ainvest.com/news/nvidia-asks-suppliers-stop-h20-ai-chip-production-chinese-concerns-2508/
[3] https://www.cnbc.com/2025/08/22/nvidia-in-talks-with-us-to-sell-more-advanced-chip-to-china-huang.html