U.S. Licences Nvidia to Export Chips to China

Reuters

A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration.

The U.S. Department of Commerce has begun issuing licences to Nvidia to export its H20 chips to China, a U.S. official told Reuters on Friday, removing a major obstacle to the AI leader’s access to a key market.

Last month, the U.S. reversed an April ban on the sale of the H20 chip to China. The company had designed the microprocessor specifically for the Chinese market to comply with Biden-era AI chip export controls.

The curbs will cut $8 billion from sales in its July quarter, the chipmaker has warned. Nvidia CEO Jensen Huang met U.S. President Donald Trump on Wednesday, two sources familiar with the matter told Reuters.

The company said in July it was filing applications with the U.S. government to resume sales of the H20 graphics processing unit to China, and had been assured it would receive the licences soon.

It is unclear how many licences have been issued, which companies Nvidia is authorised to ship the H20s to, and the value of the shipments permitted.

Nvidia disclosed in April that it expected a $5.5 billion charge related to the restrictions. In May, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials.

The Financial Times first reported Friday’s developments.

Nvidia said last month that its products have no "backdoors" that would allow remote access or control after China raised concerns over potential security risks in the H20 chip. Exports of Nvidia’s other advanced AI chips, excluding the H20, to China remain restricted.

Successive U.S. administrations have limited exports of advanced chips to China in an effort to hinder Beijing’s AI and defence development. While these measures have affected US firms’ ability to fully meet the surging demand from China — one of the world’s largest semiconductor markets — the country remains an important revenue source for American chipmakers.

Huang has said the company’s leadership position could slip without sales to China, where developers are being courted by Huawei Technologies [RIC:RIC:HWT.UL] with domestically produced chips.

In May, Nvidia said the H20 had generated $4.6 billion in sales in the first quarter, with China accounting for 12.5% of total revenue during the period.

Source: Reuters



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