Nvidia's China Sales Face Setback As H20 Chip Restrictions Catch Key Buyers Off Guard: Reuters

On Tuesday, Nvidia Corp NVDA disclosed that the Trump administration informed it on April 9 that its H20 chip would require an export license for sales to China.

The chipmaker failed to warn some major customers about new U.S. export rules to help them prepare in advance, Reuters reported, citing unnamed sources familiar with the matter.

Nvidia bagged $18 billion of H20 orders since 2025 beginning.

Also Read: Taiwan Semiconductor Preps New Chip Tech To Supercharge AI Performance By 2027

China generated $17 billion in revenue in fiscal 2024, accounting for 13% of Nvidia’s total sales.

Nvidia stock has been tanking since Tuesday. It disclosed that it booked up to $5.5 billion in charges in the first quarter due to the licensing requirement.

Chinese tech giants, including Alibaba Group Holding BABA, ByteDance, and Tencent Holdings TCEHY, have been stocking up on H20 chips, fearing further semiconductor sanctions.

They reportedly placed over $16 billion in orders for the quarter. Also, the popularity of Chinese AI startup DeepSeek’s low-cost AI models drove a surge in demand for AI computing power.

Redburn Atlantic analyst Timm Schulze-Melander named Nvidia a ‘top pick’ despite macro uncertainties and potential demand softening, citing investments in leading-edge AI and chipmaking will likely show resilience.

On Monday, Nvidia announced plans to develop $500 billion in AI-related infrastructure across the U.S. over the next four years.

Bank of America analyst Vivek Arya noted that Nvidia stock is providing a particularly attractive opportunity for one of the most unique, high-quality tech franchises leading the most significant and fastest-growing secular trends.

Price Action: NVDA stock is down 7.65% at $103.62 at the last check on Wednesday.

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