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U.S. Imposes Licensing Requirement on Nvidia H20 AI Chip Exports to China

The new restrictions force Nvidia to record a $5.5 billion charge while South Korean chipmakers remain largely unaffected.

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Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. REUTERS/Florence Lo/Illustration/File Photo
Nvidia said it expects new U.S. export restrictions to China will remain in place "indefinitely".

Overview

  • The United States now requires Nvidia to obtain licenses for exporting its advanced H20 AI chips to China, effectively halting unlicensed shipments indefinitely.
  • Nvidia anticipates a $5.5 billion financial charge and has already experienced a 6% drop in its share price following the announcement.
  • The H20 chip, previously the most advanced AI chip Nvidia could export to China under existing regulations, is central to China's AI development efforts.
  • South Korean chipmakers, such as SK hynix, are insulated from immediate impacts due to finalized sales contracts for HBM components and focus on advanced product lines for non-China markets.
  • The restrictions are expected to slow China's AI chip market growth, with broader implications for global semiconductor supply chains and industry dynamics.