Nvidia says US chip tariffs mean it faces multi-billion dollar hit

Date:
Wed, 16 Apr 2025 13:04:00 +0000

Description:
Nvidia expects $5.5 billion in export-related costs for its H20 products
alone in the first fiscal quarter.

FULL STORY

Nvidia is facing a massive $5.5 billion quarterly charge due to new US export restrictions on its H20 AI chips destined for China and other destinations, with company stock taking a fall following the revelation.

Starting April 9, the US government mandated a license for Nvidia to export
H20 chips to certain countries, with no end date set, marking a costly change for the chipmaker.

The affected nations are China (including Hong Kong and Macau) and D5
countries -- the United Kingdom, South Korea, Estonia, New Zealand and Israel.

Nvidia faces billions in export-related costs

First quarter results are expected to include up to approximately $5.5
billion of charges associated with H20 products for inventory, purchase commitments, and related reserves, Nvidia said in a SEC filing .

The tech giant noted the government-mandated license addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China
Nvidias fourth-biggest market by sales after the US, Singapore and Taiwan
(via CNBC ).

The H20 chips are less advanced versions of Nvidias H100/H200 chips, using
the 2022 Hopper architecture, designed specifically to comply with now-dated
US export restrictions for the Chinese market. In other regions, the company
is now shifting its focus to next-generaiton Blackwell chips.

Moreover, Nvidias leaders have spoken out about the effects of the ongoing trade war.

While cloaked in the guise of an anti-China measure, these rules would do nothing to enhance US security, VP of Government Affairs Ned Finkle said
during Bidens final days in office, before Trumps tariffs came into effect.

Nvidia shares now stand at $112.20, down from a one-year high of $153.13.
After spending two short periods of time as the worlds most valuable company, Nvidias market cap of $2.737 trillion now puts it in third position behind Microsoft, with Apple in first place and the only current $3-trillion company (just about).

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Link to news story: https://www.techradar.com/pro/nvidia-says-it-faces-usd5-5bn-hit-due-to-us-chip -tariffs

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