China Tightens Chip Import Checks, Expands Crackdown To Nvidia AI Chips

China is tightening control over semiconductor imports and Nvidia NVDA is once again in the crosshairs. According to the Financial Times, customs officers across major ports have begun stepping up inspections on chip shipments, part of a broader push to curb the flow of advanced U.S. technology into the country.

The crackdown began with checks on Nvidia's China-specific H20 and RTX Pro 6000D chips, after regulators ordered local firms to stop buying and cancel existing orders. But sources told the FT that inspections have now widened to cover all high-end semiconductors, as Beijing looks to crack down on smuggling and false import declarations.

Back in July, the FT reported that roughly $1 billion worth of Nvidia's top AI chips were smuggled into China over just three months. Now, Chinese officials seem determined to prevent a repeat and signal confidence that domestic chipmakers are catching up to Nvidia's performance standards.

For Nvidia, the shift is already visible in the numbers: its H20 chip brought in $4.6 billion in Q1, but shipments dried up completely in Q2. The company left H20 out of its Q3 outlook, though CFO Colette Kress said, If geopolitical issues subside, we should ship $2 billion$5 billion in H20 revenue in Q3.

The move underscores Beijing's intent to wean itself off American tech even if that means tighter trade frictions in the short term.