Nvidia’s H20 chip, designed for utilization in the Chinese market, is reportedly no longer in production due to security worries from Chinese officials. According to The Information, and citing two sources familiar with the situation, Nvidia has instructed certain component suppliers to halt production activities. This action includes Amkor Technology and Samsung, among others.

Earlier this week, China directed its data center operators to acquire at least 50% of their chips from local manufacturers, aiming to reduce dependency on American technology. This move is consistent with a broader strategy to bolster domestic production. Recently, major firms like ByteDance and Alibaba have been advised to suspend any ongoing purchases of Nvidia chips.

The H20 chip functions as a modified, less powerful version of the H100 GPU, used for AI and data analysis. In April, Nvidia faced the possibility of losing $5.5 billion due to trade barriers affecting chip sales to China, which exacerbated the company’s challenges.

Nvidia’s CEO, Jensen Huang, has expressed a desire to maintain business in China, insisting that if the Chinese market cannot access Nvidia products, they will simply develop their alternatives. Huang also stated, ‘If they don’t have enough Nvidia, they will use their own.’ However, the current landscape defines significant obstacles for the company, particularly against the backdrop of robust scrutiny from Chinese authorities regarding potential backdoors in its technology.