Bernstein Analyst Declares NVIDIA H20 Ban Was “Unnecessary And, Frankly, Somewhat Nonsensical,” Another Analyst Sees Broader Strokes Of A Rare Earths Deal

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It appears that the US has eased some of its heretofore stringent restrictions on China’s access to advanced silicon chips, unlocking a huge windfall for NVIDIA and AMD in the process, with a Citi analyst now theorizing that the reprieve could have been part of a broader rare earth magnets deal with China.

For the benefit of those who might not be aware, NVIDIA published a blog post earlier today, announcing the imminent filing of an application with the US government to resume the sale of its China-specific H20 GPUs.

As we noted in our post on this topic, NVIDIA now claims that it has received assurances from US officials that it will receive the requisite authorization promptly. As such, the company hopes to commence deliveries of the H20 GPUs to China “soon.”

Meanwhile, AMD has also announced it’s intention to seek the requisite US approvals to resume the shipments of its China-specific MI308 GPUs

This brings us to the crux of the matter. While commenting on this major breakthrough, a Bernstein analyst has noted that NVIDIA lost around $4.5 billion in its April-ending quarter from inventory write-offs and the associated purchase commitments after the Trump administration communicated to the chipmaker on the 09th of April that its H20 GPUs were to be subjected to an “indefinite” export licensing requirement.

What’s more, these licensing requirements also cost NVIDIA around $8 billion in potential revenue during the ongoing quarter. Bear in mind that NVIDIA has previously stated that its annual revenue opportunity in China stood at $50 billion.

While Bernstein is uncertain whether all customers behind NVIDIA’s pre-ban quarterly revenue run-rate in China would receive the requisite US authorizations, the firm calculates that “every ~$10B of recovered NVDA China revenues would drive roughly 25 cents in additional EPS.”

The Bernstein analyst concludes:

“We always saw the H20 ban as unnecessary and, frankly, somewhat nonsensical.”

Meanwhile, Citi has theorized that the broader strokes of a rare earth magnets deal with China might have prompted this major breakthrough:

“While US/China has patched up recently post EDA ban removal and a rare earth magnets deal, we believe this reversal could be part of the deal too.”