Why Samsung will be happy with NVIDIA H20 sales resuming in China

NVIDIA CEO Jensen Huang confirmed yesterday that the company has received approval from the US government to resume sales of its H20 AI chips to China. It had previously been banned from doing so due to the trade restrictions imposed by the government.

AI chips need a lot of memory and Samsung's got a lot of it to sell. Even as NVIDIA's approval for its HBM3E chips still evades Samsung, it's got a lot to be happy about H20 sales to China resuming.

The H20 is an AI chip that NVIDIA has specially made for the Chinese market. It's in line with the wider advanced semiconductor export restrictions that the US has placed on China. The Trump administration had previously restricted even H20 sales over concerns of national security.

However, as trade negotiations between the two countries progress, analysts say that allowing H20 sales again may be viewed as a gesture of goodwill by the United States. It should help the two global superpowers in finding a path to a workable trade deal.

The H20 chips rely on older generation HBM3 memory chips, which Samsung had previously been supplying to NVIDIA. Samsung is now expected to benefit from this resumption as sales volume will ramp up significantly and NVIDIA will need to buy a lot more HBM3 chips.

The China ban had become a drag on Samsung's memory revenues in Q1 and Q2 this year, so this should help bring those numbers up a bit for the rest of this year.