China Sees Boom in Nvidia AI Chip Repair Business Despite U.S. Export Ban

Reuters

People stand near the Nvidia logo at its booth during the China International Supply Chain Expo.

Demand is surging in China for a niche industry that, on paper, should not exist: the repair of high-end Nvidia artificial intelligence (AI) chips banned from export by the United States.

Despite U.S. export controls introduced in 2022, a growing number of boutique repair firms—particularly in Shenzhen—now service Nvidia’s restricted AI GPUs, including the H100 and A100 models. Two firms confirmed that they repair hundreds of units each month, with one establishing a dedicated company to manage growing orders. Their facilities even simulate data centre conditions to validate repairs.

The thriving repair market suggests that significant quantities of banned Nvidia chips have been smuggled into China. Leaked tenders show that Chinese government and military entities have acquired restricted GPUs, prompting U.S. lawmakers from both parties to introduce legislation to track chip locations post-sale. Former President Donald Trump’s administration has voiced support for these efforts.

While the purchase and repair of Nvidia chips are not illegal under Chinese law, sources were reluctant to be named due to the sensitive nature of the trade. Nvidia itself cannot legally offer support or replacements for restricted products inside China. An Nvidia spokesperson stressed that only the company and authorised partners can provide appropriate servicing, warning against the technical and financial risks of using unsupported hardware.

Although Nvidia’s H20 chip—developed to comply with U.S. regulations—was recently approved for sale in China, adoption has been slow. A single H20 server with eight GPUs is estimated to cost over 1 million yuan ($139,400), and the H20 is more suited to inference tasks than to the model training capabilities of the more powerful H100 chips.

As many of the H100 and A100 GPUs in China have been running continuously for years, failure rates have risen. Depending on usage, Nvidia GPUs typically require repair after two to five years. One Shenzhen-based firm charges between 10,000 and 20,000 yuan ($1,400–$2,800) per repair, while another quotes roughly 10% of the GPU’s original retail price.

Repair services include software testing, fan replacements, diagnostics for memory and circuit board faults, and component replacement.

Meanwhile, traders in China report growing demand for Nvidia’s latest high-performance B200 chips, which the company began shipping globally this year. A server housing eight B200 GPUs currently sells for more than 3 million yuan in China.

Article was originally published by Reuters.



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