Nvidia finally realises, it is time to give up on ‘China dream’, sees no … |
After months of waiting and hoping for regulatory clearance from both the US and China, Nvidia has made a decisive call: it is moving on from China — at least for now. According to a report, the American chip giant has stopped production of AI chips intended for the Chinese market. Moreover, it has reportedly shifted its manufacturing capacity toward its next-generation hardware, signalling that it no longer expects meaningful sales to China in the near term.According to a report by The Financial Times, Nvidia has redirected manufacturing capacity at its key production partner, Taiwan Semiconductor Manufacturing Company (TSMC), away from making H200 chips – positioned as its China-compliant AI processor – toward its newer Vera Rubin architecture.Vera Rubin was unveiled earlier this year and is Nvidia’s most advanced chip design to date. It is built for complex AI systems and in heavy demand from major US tech companies, including OpenAI and Google. This signals that Nvidia is betting its resources where demand is certain rather than waiting for regulatory approvals that may never come.“Instead of waiting in limbo, Nvidia has to move on to what it can achieve with certainty — especially when there’s a shortage of supply for its advanced stuff. This could in a way accelerate the Vera Rubin delivery and roll out,” one person with knowledge of the plans was quoted as saying.
How US gave ‘hope’ to Nvidia
Nvidia pushed the Trump administration for allowing it to sell high-end AI chips to China. Nvidia engineered H200 to comply with US export control rules on advanced semiconductors, making it one of the few high-end Nvidia chips that could theoretically be sold to Chinese customers. When President Donald Trump signalled in December that he would permit H200 sales to China, Nvidia moved quickly. It ramped up production, fired up its supply chain, and began preparing for deliveries as early as March. Chinese clients placed orders for more than one million units, according to the Financial Times. Nvidia CEO Jensen Huang was bullish in January said, “Demand was very high, and we’ve fired up our supply chain and H200s are flowing through the line.”However, China moved in the opposite direction as it began planning its own restrictions on H200 imports, aiming to protect its domestic semiconductor industry and push Chinese AI companies toward locally made chips.
Where things stand for Nvidia
Speaking on an earnings call last week, Nvidia Chief Financial Officer Colette Kress said: “While small amounts of H200 products for China-based customers were approved by the U.S. government, we have yet to generate any revenue. And we do not know whether any imports will be allowed into China.” Nvidia has already produced approximately 250,000 H200 chips, the report said.
