H3C Warns of Nvidia AI Chip Shortage as Demand Surges in China
Chinese server manufacturer H3C has cautioned customers about an impending shortage of Nvidia's H20 AI chips due to soaring demand and supply chain disruptions. As major Chinese tech giants like Tencent, Alibaba, and ByteDance continue expanding their AI capabilities, the increasing demand for these chips has intensified concerns about limited availability. This potential shortage highlights broader supply chain challenges amid ongoing geopolitical tensions affecting semiconductor exports.

Chinese server manufacturing giant H3C has issued a warning about a possible shortfall of Nvidia’s H20 AI chips, citing growing demand and supply chain uncertainties. As China’s AI sector rapidly expands, major companies such as Tencent, Alibaba, and ByteDance have been placing substantial orders for these chips to power their artificial intelligence advancements.
The H20 is one of the most advanced AI processors still available for the Chinese market under U.S. export restrictions. Due to its critical role in AI development, its limited supply has raised concerns among businesses relying on these high-performance chips. H3C has informed customers that stock levels are running low, with new shipments expected by mid-April 2025. However, further supply delays remain a possibility due to uncertainties in sourcing raw materials and production constraints.
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To manage the situation, H3C is reportedly prioritizing its long-term and high-value clients while assessing the broader impact of supply chain disruptions. The shortage of AI chips highlights the continued effects of U.S. trade policies on China’s technology sector. Since 2022, restrictions on the export of high-end Nvidia chips to China have forced Chinese firms to seek alternative solutions, including developing domestic AI processors.
With demand for AI infrastructure skyrocketing, industry experts predict that companies may need to explore local semiconductor options or adjust their AI strategies to mitigate the impact of supply shortages. The unfolding situation underscores the delicate balance between technological progress and geopolitical challenges in the global AI race.
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