TAIPEI, Taiwan — July 22, 2025 —
As NVIDIA officially resumes the export of its H20 artificial intelligence chips to mainland China, optimism has surged among major players in the tech supply chain. However, recent reports from The Information have stirred uncertainty, revealing that NVIDIA has informed its Chinese clients of limited H20 chip availability, raising concerns about inventory challenges and potential delays.
The news had a direct impact on Taiwan Semiconductor Manufacturing Co. (TSMC, 2330)—NVIDIA’s key production partner—whose stock opened at NT$1,145 during morning trade on Tuesday, attracting considerable market attention.
Production Disruptions and Export Restrictions
According to The Information, NVIDIA had to cancel previously scheduled H20 chip production orders earlier this year in response to stricter U.S. export restrictions imposed in April. As a result, NVIDIA temporarily relinquished its allocation on TSMC’s production lines. Although both companies have since realigned their production strategy and resumed H20 manufacturing, the disruption could lead to shipment delays of up to nine months.
Despite these adjustments, a source from the supply chain emphasized that the current inventory levels of the H20 chip remain sufficient to meet immediate demand. “There is no significant increase in short-term orders,” the insider said, suggesting the impact on customers is minimal for now.
Mainland Demand Remains Strong
Although the H20 is a reduced-performance AI chip, it remains highly sought after in China’s growing AI market. TSMC’s N4 process node, which serves as the primary production platform for the H20, is operating at full capacity. Market watchers believe the demand for AI chips in China will continue to grow, even amid regulatory challenges, and that both NVIDIA and AMD will benefit from increased mainland orders moving forward.
TSMC’s stock performance reflected the market’s cautious optimism, recovering from early dips and briefly challenging the NT$1,160 level during the morning session.
Industry experts believe the broader supply chain will likely see continued momentum, provided inventory and production challenges remain manageable in the coming quarters.
