Nvidia(US:NVDA) Xin Lang Cai Jing·2025-04-12 02:47Core Viewpoint - Nvidia's market position has been challenged globally, but it has unexpectedly benefited from a surge in H20 chip sales in China, with major tech companies placing significant orders [1][3]. Group 1: Sales Surge - In Q1 2025, Chinese tech giants like ByteDance, Alibaba, and Tencent collectively ordered at least $16 billion worth of H20 chips, nearly matching Nvidia's total sales in China for 2024, which was $17 billion [1][4]. - In 2024, Nvidia shipped over 1 million H20 chips to China, generating approximately $12 billion in revenue, while in just three months of 2025, the orders approached the previous year's total [4]. Group 2: Market Dynamics - Initially, Chinese companies were cautious about H20 chips due to performance issues and high prices, leading to a wait-and-see attitude [5]. - By the second half of 2024, market confidence rebounded, evidenced by a surge in orders at the beginning of 2025 [6]. Group 3: Supply and Demand - As of early April 2025, H20 chip inventory was nearly depleted, with new shipments expected only by mid-April, indicating a supply-demand imbalance [7]. Group 4: Drivers of Demand - The rapid growth of China's AI industry and the unique positioning of H20 chips have driven demand, particularly for low-cost AI models [8]. - Major companies are investing in AI servers based on H20 chips to support cloud services and the deployment of DeepSeek-R1 models [8]. Group 5: Competitive Landscape - Despite the current success, H20 chips face significant challenges from U.S. export restrictions and domestic regulatory pressures [10][11]. - The potential tightening of U.S. export controls poses a risk to H20's supply chain, while new energy efficiency standards in China could limit sales if H20 chips do not comply [13]. - Local competitors like Huawei are rapidly advancing, with their chips offering similar pricing and localized advantages, which could threaten H20's market position [14].