Chinese Chip Makers See Sharp Gains After Nvidia H20 Advisory

Chinese semiconductor equities surged on heavy trading following a Bloomberg report that Beijing urged local companies to avoid using Nvidia’s H20 processors — especially in government-related projects — citing alleged security concerns. The advisory touched off a broad market reaction, boosting several domestic chipmakers to multi-percent gains across Asian exchanges.

Winners on the market

Shares of Hua Hong Semiconductor climbed about 7% on the Hong Kong exchange, while SMIC (Semiconductor Manufacturing International Corporation) rose roughly 5.9%. Notably, Cambrian hit the daily upward limit on the Shanghai bourse — gaining 20% and reaching a record price — and Hejun Information advanced by around 5.7%.

These moves reflect investor expectations that any official guidance discouraging Nvidia H20 usage will favor local suppliers and accelerate procurement shifts toward Chinese-designed accelerators and GPUs.

Why the advisory matters

The guidance reportedly targeted less-advanced imported chips such as H20, urging particular caution for applications tied to government, critical infrastructure, and national-security functions. Even if the directive is advisory rather than an outright ban, its impact lies in procurement behavior: state-owned enterprises and government contractors typically follow such recommendations closely, altering large contract flows overnight.

For Nvidia, which had viewed China as a major growth market for AI accelerators, the advisory complicates efforts to fully restore lost revenue streams after earlier export restrictions. For Chinese vendors, it creates an opening to supply local projects and expand testing and deployment in domestic data centers.

Broader supply-chain and policy context

The development comes amid an ongoing tug-of-war over advanced semiconductors between the U