Nvidia has asked some component suppliers to stop production work related to its China-focused H20 chips, amidst Chinese government efforts to warn domestic companies away from Nvidia’s chips, The Information reported.
Nvidia asked Arizona-based Amkor Technology, which carries out advanced packaging work for the H20 chips, and Samsung Electronics, which makes memory for them, to stop production, the report said.
Separately, Reuters reported that Nvidia had asked Taiwanese contract electronics manufacturer Foxconn to suspend work on the H20 chips.
Trade tensions
Nvidia said in a statement provided to Silicon UK, “We constantly manage our supply chain to address market conditions.”
Speaking during a visit to Taiwan on Friday, Nvidia chief executive Jensen Huang said he was “surprised” that the Chinese government was expressing concerns about the H20 chips as “they’ve requested and urged us to secure licenses for the H20 for some time and I’ve worked quite hard to help them secure the licences”.
The H20 chips, which were developed for export to mainland China in compliance with earlier US trade rules, faced a de facto ban earlier this year, but have since resumed sales, amidst ongoing trade negotiations between the two countries.
Chinese authorities have summoned domestic companies including Tencent and TikTok owner ByteDance over their purchases of H20 chips, asking them to explain their reasons for the purchases and expressing concerns over data risks, Reuters reported earlier this month.
The Cyberspace Administration of China (CAC), the country’s cybersecurity agency, and other government bodies have also held meetings with Baidu and smaller Chinese tech firms in recent weeks, asking why they purchased Nvidia chips instead of domestic alternatives, the report said.
Bloomberg also reported that Chinese government agencies were warning companies away from H20 chips, while The Information reported that ByteDance, Alibaba and Tencent had been ordered by the CAC this month to suspend Nvidia chip purchases altogether, citing data security concerns.
Domestic industry
The reports illustrate how recent US moves to block the sale of Nvidia and AMD AI chips to China have added urgency to the country’s efforts [to reduce its reliance on imported high-end chips and chip-manufacturing infrastructure.
AI start-up DeepSeek said last Thursday that its latest model uses a technique that makes training and deploying the technology more efficient, making it well suited for use with domestic AI chips.
The company’s comments led to strong stock market gains on Friday by Chinese chipmakers including SMIC and Hua Hong Semiconductor.