US, Nvidia H20 China export completely restricted...7 trillion won losses inevitable
Nvidia, which announced plans to invest in AI infrastructure in the US, but failed to escape export restrictions (Source: Reuters)
As the us trump administration decided to fully restrict the export of Nvidia's H20 chip, a leader in artificial intelligence (AI) semiconductors, to China, Nvidia is facing multi-billion losses and a strategy revision.
On the 15th (local time), Nvidia said it received notice from the U.S. government on the 9th that prior approval is required for the export of H20 chips to China, and on the 14th, the measure was notified that it would be applied indefinitely. The U.S. government cited security concerns that H20 could be used in China's supercomputers as a basis for regulation.
The H20 chip is evaluated as a product suitable for high-performance AI learning and supercomputer construction due to its low computing performance but excellent connectivity with high-speed memory. In particular, as the Chinese AI startup Deepseek unveiled a cost-effective generative AI model using H20 last January, the presence of the chip in the market has increased.
Due to this export restriction, Nvidia is expected to incur a loss of approximately 5.5 billion dollars, or 7.8 trillion won, during the first quarter of the fiscal year (February to April). These figures include inventory processing costs, purchase commitment losses, and provisions due to the failure to deliver ordered quantities.
Previously, there were reports that Chinese big tech companies such as Alibaba, Tencent, and Bytedance ordered H20 worth 16 billion dollars (22.8 trillion won) in the first quarter alone, which is more than a 40% increase compared to the previous quarter. Ahead of export restrictions, orders surged, adding to Nvidia's burden.
This measure is interpreted as an extension of the all-round tariff pressure being carried out by the trump administration, beyond simple technology regulation. The us is currently imposing tariffs of up to 145% on products made in china and is pursuing a strategy to gain an advantage in trade negotiations. The white house is pressing for china's concessions, saying "the ball is in china's court."
Meanwhile, Nvidia CEO Jensen Huang recently had dinner with President trump at the Mar-a-Lago Resort in Florida and announced plans to invest up to 500 billion dollars (about 700 trillion won) in AI infrastructure in the us over the next four years. However, despite such promises, the H20 regulations could not be avoided.
Nvidia emphasizes that its technology is deeply used in the Chinese AI ecosystem and argues that this measure can also have a negative impact on the US's technological leadership. The company explained, "Half of the world's AI researchers are from China, and many of them are working in research institutes in the US."
After the announcement of the export restrictions, Nvidia's stock price, which was on the rise during the day, fell 6.3% in after-hours trading, and related semiconductor companies also showed weakness together. Supply chain companies, including SK hynix, are also being affected in a chain reaction.
This measure is also a signal that the us-china tech hegemony competition extends beyond mere high-performance semiconductors to relatively low-spec chips that have been in the regulatory blind spot. Geopolitical tensions surrounding semiconductors, the core component of the AI era, are expected to continue to have a strong impact on the entire market in the future.