Suppliers of key components for Nvidia’s H200 artificial intelligence chips have paused production after Chinese customs officials blocked shipments of the processors from entering China, dealing an unexpected blow to the U.S. chipmaker’s efforts to revive sales in the world’s second-largest economy. The disruption, first reported by the Financial Times, comes just weeks after the H200 received U.S. approval for export to China.
Manufacturers of essential H200 parts, including printed circuit boards tailored specifically for the chip, halted output after being informed that shipments could not clear Chinese customs, according to people familiar with the situation. The move followed a directive this week in which customs officials summoned logistics companies in Shenzhen and told them they could not submit clearance applications for the processors, though it remains unclear whether the restriction is temporary or part of a broader policy shift.
If sustained, the customs block would undermine Nvidia’s strategy in China. The company had spent months lobbying officials in Washington and Beijing to secure approval for sales of the H200, an older-generation AI chip that falls below the most restrictive U.S. export thresholds. After U.S. President Donald Trump signaled last month that such sales would be permitted, Nvidia ramped up production in anticipation of strong demand, with expectations of more than one million orders from Chinese customers, according to people with knowledge of the matter.
Suppliers had been working around the clock to meet delivery schedules, with initial shipments planned as early as March. Early batches of H200 chips arrived in Hong Kong this week, but the sudden intervention by Chinese customs caught Nvidia and its partners off guard. Faced with regulatory uncertainty, parts suppliers moved quickly to pause manufacturing to avoid being left with unsellable inventory.
The risk is particularly acute for printed circuit boards designed exclusively for the H200. Chu Wei-Chia, an analyst at SemiAnalysis, said the components cannot be repurposed for other products, heightening the financial exposure for suppliers if shipments remain blocked. The pause also reflects broader pressure from Beijing on domestic technology companies to reduce reliance on foreign semiconductors and accelerate the use of locally produced chips.
The Financial Times has previously reported that Chinese regulators were exploring mechanisms to allow limited access to the H200, which is favored by major technology groups such as Alibaba, ByteDance and Tencent for its performance and relatively straightforward maintenance. However, competing priorities among Chinese government agencies have complicated policy implementation. George Chen, a partner at The Asia Group, told the Financial Times that differing views within bodies such as the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Cyberspace Administration of China have resulted in a confusing mix of signals about Nvidia’s role in China’s AI ecosystem.
People familiar with the discussions said potential restrictions under consideration include a licensing system that would limit access to companies with advanced AI training needs, as well as requirements mandating a specific ratio of domestic to imported chips. The uncertainty has already prompted Chinese customers to reconsider their procurement strategies.
One Chinese seller of Nvidia AI servers said many local clients had cancelled orders for the H200 and instead sought the more powerful B200 and B300 chips. Those models are banned from export to China under U.S. rules, fueling the growth of a black market to meet demand. The shift highlights the distortions created by overlapping U.S. export controls and China’s own regulatory interventions.
This is not the first time Nvidia has faced pushback from Chinese authorities. Last summer, Beijing halted purchases of the H20, a lower-performance chip designed specifically to comply with U.S. export restrictions. Nvidia and China’s General Administration of Customs did not immediately respond to requests for comment.
