-The U.S. government’s ban on Nvidia’s H20 chip exports to China could wipe out $5.5 billion in expected revenue.
-H20 chip was tailored to comply with prior restrictions but now requires an export license
-NVDA stock fell 6.5% on the news
Opinion
With the H20—Nvidia’s China-customized product—now facing full export controls, the company is rapidly losing access to one of the world’s largest AI markets. This not only deals a short-term revenue blow, but may also force long-term realignment of Nvidia’s global supply chain and product strategy.
Core Sell Point
Severe export restrictions and mounting geopolitical risks pose a major earnings headwind for Nvidia. As China revenues trend toward zero and regulatory pressures grow, investor sentiment may continue to deteriorate.
The U.S. government has officially barred Nvidia from exporting its H20 AI chips to China, a move that could wipe out $5.5 billion in expected revenue for the company. The impact—equivalent to approximately KRW 7.5 trillion—will be reflected in Nvidia’s Q1 fiscal 2026 earnings, as confirmed in a recent SEC filing.
The H20 was specifically engineered with performance adjustments to avoid existing export restrictions. However, the U.S. Department of Commerce issued new directives on April 9, requiring an indefinite export license for any China-bound shipments of the H20, effectively blocking sales to Chinese supercomputing customers.
The new restriction signals a renewed escalation in the U.S.-China semiconductor trade war. Nvidia’s China exposure has already declined from 20% to about 10% of revenue, and Morningstar now warns that this could drop to zero. The stock dropped 6.5% intraday following the announcement.
The restrictions are not limited to Nvidia. The U.S. is also targeting AMD’s MI308 chips, extending the crackdown across leading U.S. suppliers of AI hardware to China.
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