Nvidia’s 300,000 H20 Chip Surge: TSMC Steps Up as Trump Lifts China Ban

Nvidia just pulled off a Silicon Valley power move—shifting its massive 300,000-unit H20 AI chip order to TSMC overnight. The trigger? A surprise policy reversal by the Trump administration, scrapping China export restrictions like yesterday's blockchain hype.

Behind the scenes: TSMC's fabs are now humming at warp speed to meet Nvidia's demand. No more begging SMIC for scraps—this is pure-play semiconductor muscle flexing.

The finance angle: Wall Street analysts are already pricing in the 'Trump bump' for AI stocks. Because nothing says 'stable investment thesis' like geopolitics flipping faster than a crypto whale's leverage position.

Huang signals a restart could take nine months

Jensen Huang, Nvidia’s CEO, visited Beijing earlier this month. He told Chinese customers that the company’s decision to restart H20 production WOULD depend on how many units they commit to buying. 

He also made clear that even if the green light comes, it would take nine months to restart the supply chain. After the trip, Huang told customers that stocks were limited and that Nvidia had no immediate plans to begin wafer production again, according to The Information.

Right now, the company still needs export licenses to ship the chips out. Nvidia said in mid-July that U.S. authorities assured them those licenses were coming, but they haven’t been approved yet, according to two people with direct knowledge.

In the meantime, Nvidia has asked Chinese buyers to submit updated documents, including detailed forecasts from their own clients showing exactly how many chips they need. The company wants that paperwork in hand to speed up approvals once the Commerce Department signs off.

Before the April ban, Chinese tech firms like Tencent, ByteDance, and Alibaba had already increased their orders of the H20 as they worked on DeepSeek’s cost-saving AI models and their own tools.

When the ban hit, Nvidia warned that it might have to write off $5.5 billion in unsold chips. On the Stratechery podcast, Huang also said the company would miss out on as much as $15 billion in potential sales.

Trump’s trade deal linked to rare earths

The decision to let H20 sales resume wasn’t random. Trump’s administration confirmed that the MOVE was part of ongoing negotiations with China over rare earth magnets, which Beijing had been restricting as trade tensions grew.

These magnets are crucial for many U.S. industries, and easing chip sales was used as leverage in those talks. But not everyone in Washington agrees with the decision.

Lawmakers from both parties criticized it, warning that the H20 still gives China access to tools that can help it build up its AI systems and compete with the U.S. on strategic technologies.

There’s concern that even a stripped-down chip like the H20 could be used in ways the U.S. can’t control once it crosses the border.

Nvidia, on the other hand, has pushed back on that idea. The company says that if it completely pulls out of China, developers there will switch to Huawei, which already offers alternative chips, even though they’re not as strong.

There’s already proof that Nvidia’s hardware still holds major appeal, smuggling and repair demand for banned GPUs has skyrocketed, with some users trying to keep old cards running as long as possible.

Nvidia has already sold about 1 million H20 chips this year, according to SemiAnalysis. With the 300,000 new units being added to production and older inventory still on hand, the company seems to be betting that Chinese demand is strong enough to justify the risk. But until those export licenses arrive, nothing moves.

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