H20 Subject to U.S. Export Controls, Huaqin Technology: Operations Proceed in Order, Industry Chain Inventory Supports Normal Shipments in H1

On April 15, US time, Nvidia announced that the company had recently received a notice from the US government stating that the export of H20 chips and chips with H20 memory bandwidth and interconnect bandwidth to China and other regions requires a license.

After the news was made public, concerns arose in the market regarding the operational status of domestic industry chain companies. In response, Huaqin Technology (603296.SH) stated on its official investor account on April 16: "Currently, the company has not received any notifications regarding changes in customer orders, and business is proceeding normally and orderly." Regarding the risks posed by the current uncertainties surrounding H20, Huaqin Technology stated that "the industry chain has made full preparations for such uncertainties, and the company believes that the current industry chain inventory can support normal shipments in the domestic market for H1."

Since the Trump administration introduced new tariff policies on April 3, the tariff war has intensified. Recently, the Trump administration has been continuously announcing new changes, increasing uncertainties in the semiconductor industry. Previously, the Trump administration had briefly decided to suspend the ban on H20 exports, but on April 15, US time, Nvidia's 8-K filing indicated that the US government is restricting the export of its H20 chips to China, severely undermining this product line originally designed to address previous export controls.

Public information shows that Nvidia's H20 chip was launched to comply with US export restrictions and is an AI accelerator specifically designed for the Chinese market. The H20, based on Nvidia's Hopper architecture, features 96GB of HBM3 memory and provides 4.0TB/s of memory bandwidth. In terms of computing power, the H20's FP8 performance is 296 TFLOPS, and its FP16 performance is 148 TFLOPS. Compared to the H100, its GPU core count is reduced by 41%, and its performance is lowered by 28%.

In this context, capital market concerns about domestic industry chain companies have intensified. On April 16, the stock prices of companies across the industry chain, such as Huaqin Technology, OFILM (300738.SH), and Foxconn Industrial Internet (601138.SH), also saw significant declines.

In response, Huaqin Technology also provided a statement on April 16: "The industry chain's expectations regarding the uncertainties of H20 began to form in H2 2024. With the current trade controls on H20, the industry chain has made full preparations for such uncertainties, and the company believes that the current industry chain inventory can support normal shipments in the domestic market for H1."

It is understood that Huaqin Technology is a smart product platform company and a software and hardware service provider in the AI full-scenario, offering end-to-end services from product R&D to operational manufacturing for global technology brand customers, and is a key member of the computing power industry chain.

Huaqin Technology stated that domestic computing power demand is currently in a phase of continuous vigorous development. As a core supplier to leading internet customers, the company will continue to leverage its core strengths to achieve sustained market share and performance growth. The data business has achieved scaled shipments of full-stack products (AI servers, general-purpose servers, storage servers, and high-performance network switches), and rapid growth in general-purpose servers and switches is expected in 2025.

"Even in the face of the uncertain risks posed by H20, the company remains confident that the overall revenue of the data business will maintain significant growth in 2025. The company expects overall revenue to maintain a growth rate of over 20%," Huaqin Technology said.

Nvidia's latest forecast indicates that the company's Q1 financial statistics (February 2025 to April 27, 2025) will include approximately $5.5 billion in expenses related to the H20 product, involving inventory provisions, purchase commitments, and related reserves.

The continuous pressure from the Trump administration may, as Nvidia has previously stated, only strengthen China's determination to reduce its reliance on US technology and weaken the competitiveness of US companies.