Nvidia to Resume H20 Chip Sales in China as Trade Tensions Ease
Summary
Nvidia announced it will resume H20 GPU sales in China after the U.S. government indicated export licenses would be granted, signaling easing trade tensions. This news caused Nvidia's stock to rise 3.3% in extended trading. China is a critical market for Nvidia, contributing 13% of its FY2025 revenue. The H20 chip is popular among top Chinese AI developers, and its re-entry into the market is expected to significantly boost Nvidia's revenue and global AI positioning.
Nvidia to Resume H20 Chip Sales in China Amid Easing Trade Tensions
NVIDIA Corporation (NASDAQ:NVDA) announced on Monday, July 15, 2025, its intention to resume sales of its H20 GPU in China. This development follows assurances from the U.S. government regarding the granting of export licenses, signaling a potential de-escalation of trade restrictions between the two economic superpowers.
Following the announcement, shares of Nvidia rose 3.3% to $169.40 in extended trading, reflecting investor optimism about restored revenue streams from the Chinese market.
Key Developments
- CEO Jensen Huang confirmed during his visit to Beijing that applications are being filed to resume H20 chip sales, which had been blocked earlier in 2025.
- The U.S. Department of Commerce is now expected to issue export licenses, indicating a relaxation of key trade restrictions.
- Nvidia also unveiled a new GPU specifically designed for Chinese AI smart factories and logistics, underscoring its strategic commitment to re-engage with the Chinese market.
Strategic Importance of the Chinese Market
China has historically been a crucial market for Nvidia, contributing significantly to its financial performance. In fiscal year 2025, China generated $17 billion in revenue for Nvidia, accounting for 13% of its total revenue, according to company filings. The company had previously projected up to $5.5 billion in charges due to the chip bans.
The easing of tariffs and improved diplomatic engagement between the U.S. and China in May and June have created a renewed growth opportunity for Nvidia and other semiconductor companies, such as Synopsys (NASDAQ:SNPS), in the Chinese market.
Market Outlook and Product Relevance
The H20 chip, engineered to comply with Biden-era trade restrictions, has maintained popularity among leading Chinese AI developers, including Tencent, DeepSeek, Baidu (NASDAQ:BIDU), and Alibaba (NYSE:BABA).
Nvidia's ability to re-enter this significant market with regulatory approval is expected to substantially bolster its near-term revenue potential and reinforce its global leadership in AI computing.
Bottom Line
With the H20 chip now greenlit for sale in China, Nvidia is well-positioned to reaccelerate its growth in one of its most vital international markets. This reversal in export restrictions could also positively influence investor sentiment across the broader semiconductor sector, as it suggests a potential shift towards more cooperative trade relations between Washington and Beijing.