Nvidia H20 chip Photo: VCG

All countries should work together to uphold the stability and smooth operation of global industrial and supply chains, Chinese Foreign Ministry (FM) Spokesperson Mao Ning said on Friday, following reports that Nvidia had asked some of its component suppliers to halt production of its H20 chips.

Nvidia reportedly has asked Arizona-based Amkor Technology, which handles the advanced packaging of the company's H20 chips, and South Korea's Samsung Electronics, which supplies memory for the company, to halt production, according to a CNBC report citing The Information on Friday.

A report from Reuters, citing two people briefed on the matter, said that Nvidia had asked Foxconn to suspend work related to H20 chips. Foxconn, formally known as Hon Hai Precision Industry Co, handles backend processing work as one of Nvidia's component suppliers for the chip, per the report.

Mao responded to the issue at a Friday press briefing. "As a matter of principle, we have consistently maintained that all countries should work together to uphold the stability and smooth operation of global industrial and supply chains," she said.

When asked to comment on the reports, Nvidia said in a statement sent to the Global Times on Friday: "We constantly manage our supply chain to address market conditions."

These developments come as Washington increases scrutiny over China's access to US artificial intelligence (AI) technologies and strengthens efforts to tighten export controls. The US has been seeking to advance the Chip Security Act on national security grounds since May this year. Against this background, concerns have also been mounting over the security of H20 chips. 

Last week, the Financial Times reported that Nvidia and AMD had agreed to give the US government 15 percent of the revenues from their chip sales in China. The report said the move was "part of an unusual arrangement with the Trump administration," in order to obtain export licenses for the semiconductors.

Nvidia reportedly is developing a new artificial intelligence chip for China based on its latest Blackwell architecture that will be more powerful than the H20 model it is currently allowed to sell there, Reuters reported, citing sources.

The H20 chip was developed specifically for the Chinese market after US export restrictions were imposed by the US government in 2023. Sales of the chip were effectively banned by the US in April this year, according to multiple media reports. 

The latest news further clouds the prospects for the H20's return to the Chinese market, especially amid security concerns and what many see as further intervention by the US government, Ma Jihua, a veteran telecom industry observer, told the Global Times.

Following the US ban on H20 chip exports in April, Chinese companies have ramped up efforts to strengthen self-reliance in semiconductor supply, with many firms accelerating their shift to domestic suppliers such as Cambricon and Huawei, Ma said, adding that Chinese tech companies are gradually adapting to this shift, particularly in the field of AI computing power.

Chinese companies have long been working to achieve breakthroughs in domestic chip production to reduce reliance on US technology. 

China's intelligent computing power is set to expand rapidly in the coming years, driven by surging demand for large models and generative AI, Xinhua reported in February, citing a report from market research firm IDC. Based on half-precision (FP16) intelligent accelerator card performance, China's intelligent computing power reached 725.3 EFLOPS in 2024, surging 74.1 percent year-on-year, per the report.

In July, China's cyberspace regulator summoned Nvidia for talks regarding security risks linked to vulnerabilities and potential backdoors in its H20 AI chips sold in China, in accordance with relevant laws. The company was asked to provide explanations and evidence to address these concerns.

Despite repeated assurances from Nvidia, People's Daily published an opinion piece earlier this month titled "How Can We Trust You, Nvidia?" The piece urged the chipmaker to provide proof of its security measures to regain the trust of Chinese customers.

In response to a question about the potential new Nvidia Blackwell chip for China, Lin Jian, another FM spokesperson, stated on August 12, "China has made clear its principled position more than once on US exports of chips to China. We hope the US will take concrete actions to keep the global industrial and supply chains stable and unimpeded."