Affected by the US government’s arbitrary obstruction of H20 chip exports to China, Nvidia’s stock price fell sharply by over 6% after Tuesday’s trading. At the same time, the stock prices of many Nvidia suppliers in Japan and South Korea also fell after the opening on Wednesday.

Nvidia released an 8-K document on the 15th local time, stating that the company has recently received a notice from the US government that exporting H20 chips and chips with H20 memory bandwidth, interconnect bandwidth, etc. to countries and regions such as China requires a license.

Nvidia expects inventory, procurement commitments, and related reserve expenses related to H20 products to reach approximately $5.5 billion in the first quarter performance.

Affected by this news, Nvidia’s stock price plummeted sharply after Tuesday’s trading session, dropping more than 6%. Nvidia closed up 1.35% on Tuesday, closing at $112.20.

Tomo Kinoshita, Global Market Strategist at Jingshun, said, “The US government’s move stems from concerns about China’s rise in the electronics sector, which is expected to have a significant negative impact on the semiconductor supply chain.”

During the Biden administration, the United States imposed restrictions on the export of artificial intelligence chips in 2022 to prevent the sale of the most advanced chip products. The H20 chip, designed based on NVIDIA’s previous generation artificial intelligence chip architecture Hopper, is itself a “castrated” product launched on the basis of the H100, aimed at complying with relevant export restrictions in the United States.

It is reported that the revenue generated by this chip in 2024 is estimated to be between $12 billion and $15 billion, and it once became Nvidia’s main AI chip sold in China after the H100/A100 was banned.

Nvidia has consistently believed in recent years that further regulation of its chips by the US government will suppress competition and may even weaken the US’s global competitiveness in the technology sector.

It is worth mentioning that due to Nvidia’s mention of US government licensing restrictions in the announcement, which involve any other chips with specifications equivalent to H20 memory bandwidth and interconnect bandwidth, industry insiders are also concerned about whether some other companies’ chips will be affected. AMD’s stock also fell more than 7% in after hours trading on Tuesday.

Among major Asian suppliers, the stock price of Japanese testing equipment manufacturer Advantest Corp. fell by 5.6% early in the day, while South Korean memory manufacturer SK Hynix fell by 3.7%. Nvidia’s largest wafer foundry, TSMC, fell 2% in the US stock market after closing.

Industry research analyst Ken Hui wrote in a report that due to the weak economic outlook, TSMC may have slowed down some of its production expansion, and stricter regulations on Nvidia sales may exacerbate this slowdown.