Nvidia encounters difficulties in China

Nvidia, the leading American technology company, is currently embroiled in a controversy surrounding its H20 chips. The company's CEO, Jensen Huang, has denied allegations of potential security risks in the H20 chips, stating that they do not contain any functions that could enable external access or tracking.

However, the Cyberspace Administration of China is investigating the H20 chips for potential security risks, including alleged "backdoors" or tracking functions that could enable external access. This investigation has led to a halt in production of the H20 chips for China, with Nvidia instructing suppliers Samsung, Amkor, and Foxconn to comply.

The affected parties include U.S.-based Amkor Technology, South Korean memory provider Samsung Electronics, and Taiwanese conglomerate Foxconn. The halt in production is due to Beijing's security concerns and ongoing investigation. Chinese tech giants like ByteDance, Alibaba, and Tencent have also been directed to cease purchasing H20 chips.

Despite these challenges, market hopes remain high for a positive revenue surprise in Nvidia's second-quarter results, which are set to be released on Wednesday, August 27. Investors are running profits with Nvidia shares but have maintained a stop-loss at 120.00 euros.

Jensen Huang is in close communication with Beijing to address the concerns regarding the H20 chips. If the conflict with China is resolved, Nvidia will be required to share 15% of the revenue from the production and sale of its H20 chips in China with the U.S. government, as part of a pending deal. However, no Chinese partners for production participation have been publicly confirmed so far.

It's important to note that the publication of this article is made by Börsenmedien AG, whose board and majority shareholder, Mr. Bernd Fötsch, has entered into direct and indirect positions in the financial instruments mentioned in the publication or related derivatives.

In a positive development, Nvidia has recently received approval from the U.S. government to resume shipments. The shareholder also expects a resolution with China to be found.

As the situation unfolds, investors and tech enthusiasts alike will be watching closely to see how Nvidia navigates this challenging period and what impact it may have on the company's future.