Nvidia has told some of its component suppliers to pause production of its H20 chips after the Chinese government issued a mandate to publicly-owned Chinese data center companies, requiring them to source more than 50 percent of chips from domestic producers.

According to a report from The Information, Nvidia has told chip packaging firm Amkor and high-bandwidth memory (HBM) supplier Samsung to stop production of the China-bound semiconductors.

The directive from the Chinese government follows claims it made earlier this month that the H20 chips pose a national security threat, expressing concerns about backdoor access being inserted into the semiconductors.

On Friday, Nvidia CEO Jensen Huang said the company was in discussions with the Chinese government regarding their concerns, adding he was hopeful they would be able to resolve the issue.

"I'm very grateful that the US government, the Trump administration, has approved licenses for us to export H20s to China," Huang said, in comments reported by Nikkei Asia. "Recently, China asked some questions about some security backdoors in our chips. We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has been. And so hopefully, the response that we've given to the Chinese government will be sufficient. We're in discussions with them."

He added that he was surprised that the Chinese government raised such concerns, noting that they’ve long been pushing for the licenses to be approved.

Earlier this week, it was reported that Nvidia is developing a new AI chip for China based on its Blackwell architecture.

Tentatively known as the B30A, it would be more powerful than Nvidia’s current China-specific GPU, the H20, but provide around half the compute power offered by Nvidia’s B300 GPUs.

In a press conference following the announcement that Nvidia and AMD had agreed to pay the US government 15 percent of the revenue generated from the sale of its H20 and MI380 chips as a condition for obtaining export licenses for the semiconductors, President Donald Trump alluded to the fact that Nvidia was looking to make its Blackwell chips available to the Chinese market.

However, he went on to say that an agreement for exporting Blackwell chips could be possible if Nvidia “somewhat enhanced [Blackwell] in a negative way.”