UNITED STATES semiconductor giant Nvidia has projected potential losses of up to US$5.5 billion in the current financial quarter following the Biden administration’s latest move to tighten export restrictions on advanced artificial intelligence (AI) chips bound for China.
Bernama-dpa cited, in a regulatory filing, Nvidia disclosed that its H20 chips—high-performance AI processors specifically redesigned for the Chinese market to comply with previous US trade rules—will now require a special export licence before being shipped.
The revised curbs are aimed at limiting China’s access to cutting-edge semiconductor technology, particularly for use in supercomputing programmes, according to a report by the German news agency dpa.
Nvidia’s chips are widely regarded as essential components in the development of AI technologies, with Chinese tech giants such as ByteDance, Alibaba and Tencent among those heavily reliant on them.
The company explained that the US$5.5 billion impact relates to inventory write-downs, purchase commitments and provisioning for the affected H20 product line.
Earlier this year, several Chinese firms rushed to place bulk orders for the H20 chip in anticipation of further export restrictions from Washington. According to a report by tech news portal The Information, total orders for the chip in the first quarter alone exceeded US$16 billion—an amount that far surpasses Nvidia’s production capacity for the product.
While the US government has framed the export controls as necessary for national security, critics argue that such restrictions may accelerate China’s efforts to develop its own domestic semiconductor alternatives, further intensifying technological competition between the two global powers.
Nvidia, which has already begun exploring alternative strategies to maintain its presence in key international markets, did not confirm whether it would seek export licences under the new rules or shift its manufacturing and supply chain operations. – April 16, 2025
