Jensen Huang’s Nvidia hit by surprise customs block in China for flagship H200 chip, suppliers pause production: Report
According to the Financial Times, citing sources, suppliers of parts for technology giant Nvidia’s H200 chips paused production after customs officials blocked AI processor shipments from entering China.
A source told the FT that Nvidia was “caught off guard” by the development, with the first shipments due to arrive in Hong Kong this week.
The report also stated that they reached out to the China General Customs Administration and Nvidia for clarifications, but did not receive immediate answers to the questions.
Nvidia’s suppliers have a solution: Some parts cannot be used for other products
Notably, the US approved Nvidia’s sale of AI processors in China last December. But parts manufacturers of key components are now worried that it is Chinese authorities who will block shipments and then seek to write off the losses, two sources said in the report.
SemiAnalytics analyst Chu Wei-Chia told the FT that the printed circuit boards produced for the H200 chips were specially designed and could not be reused in other products, raising concerns about overproduction.
Nvidia estimates 1 million orders from Chinese customers will be affected
It is noteworthy that Nvidia CEO Jensen Huang is enthusiastic about the Chinese market and is lobbying hard with Washington and Beijing to approve the sale of H200 chips. The company ramped up production for an estimated order of more than 1 million orders from Chinese customers after US President Donald Trump signaled he would give in in December, a source told the FT.
The source added that deliveries were planned for March, but their fate was left hanging due to the uncertainty of customs officials.
Chinese customs authorities block Nvidia’s H200 chip: What happened?
It also reported that Chinese customs officials this week told a logistics company in Shenzhen that Nvidia’s H200 chips were not allowed into the country. The source added that there was no reason given for the ban or any indication whether this was a temporary step or a permanent ban.
Sources said domestic technology companies were warned not to buy Nvidia chips and were told to prioritize domestic options instead.
The report stated that officials discussed limited access to H200 chips for use by technology giants such as Tencent, Alibaba and ByteDance for projects requiring higher performance and easier maintenance.
Along with suppliers, Chinese customers are also rethinking their H200 purchases amid the uncertainty. One of the suppliers told the FT that orders for Nvidia’s H200 chips had been canceled and instead created a black market for the banned but more advanced B200 and B300 chips.
