US curbs on Nvidia chips: What it means for different countries

Seoul: The United States has tightened restrictions on the export of Nvidia’s H20 artificial intelligence (AI) chips to China — a move that could have ripple effects across the global semiconductor industry. However, experts believe that the immediate impact will vary from country to country, with South Korean chipmakers expected to weather the storm better than others.

The H20 accelerator, Nvidia’s most advanced AI chip still eligible for export to China under earlier rules, will now require a license for future shipments. Nvidia confirmed that US authorities have notified the company of the new regulation, which effectively halts its unlicensed exports to China indefinitely.

South Korea: Limited fallout expected

For South Korea, the immediate impact appears to be limited. SK hynix, which supplies its eight-layer HBM3E high bandwidth memory (HBM) for the H20 chips, has already completed sales contracts for those chips. This means the new restrictions will not affect the company’s revenue or trigger inventory write-downs.

Samsung Electronics, meanwhile, does not supply HBM for the H20 model and is thus not directly affected. SK hynix is now focusing on its newer 12-layer HBM3E chips used in AI models outside China, insulating it further from the fallout.

“SK hynix completed additional sales of HBM for H20 in March, so it will not face inventory write-downs like Nvidia,” said Chae Min-sook, a researcher at Korea Investment & Securities Co. “We estimate that the sanctions will not change SK hynix’s annual HBM production plan or its earnings estimates.”

China: Direct hit to AI ambitions

The biggest blow will likely be felt in China, where companies had been relying on Nvidia’s H20 chips for developing cost-effective AI models. The curbs are expected to dampen the recent momentum in China’s AI chip sector, which had been growing rapidly with support from local players like DeepSeek.

United States: Nvidia takes a financial hit

Nvidia itself will feel the heat. The company expects to take a $5.5 billion charge due to the halt in H20 chip exports to China. Nvidia shares dropped about 6 per cent in after-hours trading following the announcement.

Global outlook: Rising uncertainty

While countries like South Korea may not face direct short-term consequences, there are growing concerns over the long-term implications. Industry insiders warn that a prolonged slowdown in China’s AI market could affect the global supply chain and reduce demand for high-performance chips.

“Although the U.S. restriction has no direct impact, it could dampen momentum in the AI chip business and limit future opportunities,” said an official at a South Korean semiconductor firm. “It has also increased uncertainty and concerns over the industry’s future outlook.”

Reflecting broader market concerns, shares of SK hynix and Samsung Electronics dropped 3.65 per cent and 3.36 per cent, respectively, on the Korea Composite Stock Price Index, which itself fell 1.21 per cent.

PNN & Agencies

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