Nvidia has ordered 300,000 H20 chips from Taiwan Semiconductor Manufacturing Co (TSMC), according to sources.

This move follows strong demand from China and adds to an inventory of 600,000 to 700,000 chips.

In 2024, Nvidia sold about 1 million H20 units, according to SemiAnalysis.

The US recently reversed an April ban on H20 chip sales to China. The H20 chip is designed specifically for the Chinese market and has less computing power than Nvidia’s H100.

Nvidia is waiting on export license approvals from the U.S. Department of Commerce and expects them soon.

Some US lawmakers have criticized the decision, citing concerns about AI leadership. Nvidia argues staying in China is crucial to avoid losing market share to competitors.

Nvidia, TSMC, and the Commerce Department declined to comment.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Export restrictions create costly inventory cycles for chip companies

Nvidia’s $300,000 chip order demonstrates how geopolitical trade controls force companies into expensive inventory management cycles.

The company previously warned it would need to write off $5.5 billion in H20 inventories after the April ban, while also foregoing $15 billion in potential sales according to CEO Jensen Huang.

In May 2025, Nvidia reported another $4.5 billion write-off related to diminished H20 demand, showing how these restrictions create recurring financial hits even for market leaders1.

This reveals how export controls don’t just block sales. They force companies to build massive stockpiles during permitted periods, then face major losses when restrictions change.

Nvidia’s decision to switch from relying on existing inventory to placing new orders with TSMC reflects this volatile cycle, where companies must constantly adjust production plans based on shifting regulatory landscapes.

2️⃣ Competition intensifies when market leaders face access restrictions

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