Nvidia has informed its Chinese clients that it has limited inventory of its H20 artificial intelligence chips—the most advanced processors the company has been permitted to sell in China under U.S. export restrictions—and that it does not intend to resume production of the chip.

The report, citing two sources familiar with the matter, states that Nvidia was compelled to cancel customer orders and production slots at Taiwan Semiconductor Manufacturing Company (TSMC) following a U.S. government ban imposed in April, which barred further sales of the H20 chips to China.

The H20 is part of a modified series of Nvidia AI chips designed to comply with U.S. export rules introduced in late 2023. It was created to allow continued business with Chinese clients amid rising U.S.-China tensions over advanced semiconductor technology. However, the April ban effectively ended new sales, forcing Nvidia to pull back on deliveries and manufacturing commitments.

Despite the production halt, Nvidia announced earlier this week that it plans to resume sales of existing H20 chip stock to customers in China. The company did not provide further details on the volume or timing of these resumed sales.

The developments underscore the ongoing uncertainty surrounding U.S. export policy and its impact on Nvidia’s operations in China, which had been one of its key growth markets for AI hardware before the escalation of geopolitical restrictions.

Nvidia has not yet publicly confirmed whether the decision to end production of the H20 is final or if future chip designs will be tailored to comply with evolving export guidelines.