based on materials from the site - By Cryptopolitan_News

Nvidia has asked several of its suppliers to suspend work on H20 processors specifically designed for China due to increasing pressure from Beijing.

This decision was made after Chinese regulators demanded that Chinese tech companies cease purchasing chips from the American company on national security grounds, according to reports published on Friday.

It is reported that the company instructed Arizona-based Amkor Technology to suspend the development of advanced packaging for the H20 chips. South Korean company Samsung Electronics, which supplies memory for the processors, was also asked to suspend its part of the production. According to a separate report by Reuters, Taiwanese Foxconn was also instructed to suspend relevant work.
It is now unclear whether the H20 chips will return to China.
This event introduces new uncertainty regarding whether Nvidia's H20 chips will return to the Chinese market. Earlier this year, Washington announced the issuance of export licenses for supplies to China after a previous restriction imposed in April blocked them.

Last month, the Cyberspace Administration of China summoned Nvidia to discuss national security risks associated with the H20 processor. Regulators asked Nvidia to provide more detailed information about the operation of these chips.

Beijing expressed concerns that the H20 chips could contain hidden tracking tools or features that allow for external control, as previously reported by Cryptopolitan. In May, U.S. lawmakers introduced the Chip Security Act, which will require companies like Nvidia to include security and location tracking features in advanced artificial intelligence (AI) processors.
Speaking in Taiwan, Nvidia CEO Jensen Huang stated on Friday that the Chinese side raised questions about possible 'backdoors' in the security system. He emphasized that the company made it clear that such features do not exist.

He added that Nvidia was caught off guard by the requests but is working to meet the regulators' requirements. Huang stated that he has made efforts to obtain licenses for H20 and expressed hope for a swift resolution to this issue.

Nvidia clarified that H20 is safe for use.
The company noted that both Washington and Beijing understand that this chip is not intended for military or government infrastructure. Nvidia added that just as the U.S. government does not depend on Chinese chips, China will not use American processors for government needs. However, the company stated that commercial use of such chips is beneficial for both economies.

Previously, Huang called the U.S. government's agreement to sell H20 in China a victory. The company has lobbied for its interests against Washington's restrictions on chip exports, which have led to a reduction in its business in one of the largest markets.

In his speech on Friday, Huang also mentioned negotiations with U.S. President Trump regarding the company's overseas operations. He emphasized the importance of maintaining U.S. leadership in artificial intelligence technology and stated that global AI development will continue regardless, so American companies should maximize exports during this critical moment for the industry. In May, Nvidia recorded a write-off of $4.5 billion due to unsold H20 inventory following the introduction of export restrictions. The company also reported that without these restrictions, its revenue for the last quarter would have been $2.5 billion higher.

Industry experts warn that the current scrutiny in China may further complicate the company's prospects. Bernstein analyst Qingyuan Lin told CNBC that a complete ban on H20 sales in China could jeopardize over $20 billion in Nvidia's annual revenue. He noted that the company may continue to sell less advanced chips until 2026, but by 2027, local competitors are likely to meet most of the demand themselves.

Analysts also believe that Beijing's measures reflect its drive for self-sufficiency in semiconductors in response to Washington's attempts to maintain U.S. dominance in artificial intelligence.


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