Nvidia’s (NVDA) long-awaited return to the Chinese market is off to a rocky start. The chipmaker is reportedly facing supply chain issues as it tries to restart H20 AI chip sales. Meanwhile, John Moolenaar, a Republican representative, also raised concerns about Nvidia resuming sales of H20 chips to China. These issues could hurt Nvidia’s comeback in the region, which remains an important source of revenue for the company.
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Nvidia Faces Supply Issues
Last week, Nvidia confirmed it will soon resume H20 chip shipments to Chinese buyers after receiving export license approval from the Trump administration. However, fears of a policy reversal have sparked a surge in demand.
In response to a surge in orders from Chinese tech giants like ByteDance and Alibaba (BABA), Nvidia has reportedly told customers that H20 chip supplies are limited and it doesn’t plan to restart production soon. The company is now working to manage customer expectations amid ongoing constraints.
Additionally, sources say that Nvidia canceled its chip production plans with Taiwan Semiconductor (TSM) after the April ban. Since then, TSMC has reassigned those lines to other clients, and with its factories now full, switching back quickly isn’t possible. Moreover, CEO Jensen Huang said in Beijing that producing new chips from scratch could take at least nine months, so Nvidia will rely on existing stock until it runs out.
And the Political Pushback
Apart from production woes, Nvidia’s China comeback is also facing political pressure.
In a letter to Commerce Secretary Howard Lutnick, Moolenaar warned that selling H20 chips to China could boost its tech power and weaken U.S. efforts to limit advanced chip access for national security.
He wrote, “The Commerce Department made the right choice by banning the H20.” He believes that the U.S. shouldn’t allow its chips to power China’s military AI, control its people, or threaten American innovation.
What Is the 12-month Price Target for Nvidia?
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 34 Buys, three Holds, and one Sell assigned in the last three months. At $182.49, the Nvidia average stock price target implies a 6% upside potential.
Year-to-date, NVDA stock has gained 28.4%.
