Nvidia Chip Shortage Could Be Coming, Even as Demand Increases
Nvidia’s H20 chip, an extremely advanced AI processor, could be plagued by a shortage soon, says Chinese server maker H3C, right in the midst of a high demand for the chip.
The inventory of H20 chips may not keep up with the need for it, although a new shipment is expected in the middle of April. The demand for H20 chips from Nvidia has been on the rise, as this chip is very important in processing powerful AI programs.
Chinese company H3C is warning that it will have to provide only limited supplies of this chip for now. That could come at the wrong time for the Chinese market, since AI development is ramping up there, with tech firms rapidly adopting AI programs into their businesses.
On Tuesday, the company said that their supply of H20 chips was almost gone, and they don’t expect a resupply for another few weeks. DeepSeek AI models have proven cost effective for companies trying to incorporate artificial intelligence, driving up the demand in a time when supplies are short.
Nvidia Stock Movement
The Nvidia (NVDA) stock price is down 1.53% today and has been trending down for much of the month. With tariff fears concerning tech items escalating, Nvidia may be caught in the trade war crossfire. The company is also feeling the pressure from cheaper options from competitors that could produce AI programs that are just as powerful as what Nvidia’s own chips make.
This is the lowest that Nvidia stock has been since September of last year. That means it is the right time for investors to jump in, since many analysts consider Nvidia future proof. It has been one of the market strongest performers for years, and its recent lows have not decreased confidence in the stock’s ability to be very profitable in 2025. Expectations are high that Nvidia will recover soon and will not stay at its currently low price for very long.
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