Nvidia has reportedly placed an order for 300,000 units of its H20 artificial intelligence chips from Taiwan Semiconductor Manufacturing Company (TSMC), indicating a sharp rebound in demand from Chinese tech companies. This strategic move comes after the company adapted to U.S. export restrictions by tailoring AI products specifically for the Chinese market.

The H20 chip, part of Nvidia’s special export-compliant lineup, is designed to remain within regulatory limits while still delivering competitive AI performance. Despite being less powerful than the H100, the H20 has garnered strong interest from firms in China amid an AI race fueled by local initiatives and government backing.

📦 TSMC to Handle Massive Nvidia Production Order

TSMC, the world’s largest semiconductor foundry, is tasked with fulfilling the bulk H20 order, signaling confidence in the chip’s manufacturability and relevance. Sources suggest that the 300,000 chips are to be produced in the latter half of 2024, with shipments expected by early 2025.

The order also reflects how Nvidia is navigating geopolitical tensions while retaining a strong footprint in the highly lucrative Chinese AI market. With Chinese tech giants like Alibaba, Tencent, and ByteDance pushing aggressively into AI, demand for Nvidia’s regulatory-compliant chips remains high.

🔍 A Strategic Move in a Sensitive Market

The massive H20 order represents Nvidia’s effort to balance between U.S. export controls and its ongoing dominance in AI hardware. While restrictions have blocked shipments of Nvidia’s flagship H100 and A100 chips to China, the company’s new generation of modified products allows continued engagement in the region.

The order’s scale — 300,000 units — speaks volumes about the underlying AI acceleration across China. Analysts view this as a calculated pivot that helps Nvidia remain competitive globally, without violating international trade policies.