The U.S. government recently RELAXED EXPORT RESTRICTIONS AND ALLOWED NVIDIA TO resume EXPORTS of H20 CHIPS TO mainland CHINA. The market expects that shipments of the chip will reach 400,000 in the second half of this year, which will drive server-related demand to warm up. Taiwan’s cooling supply chain is expected to benefit from this, including manufacturers such as Qihong, Shuanghong, Jiance and Jianzhun. Revenue growth momentum is expected.
The H20 chip was originally a reduced version launched by Pfizer in response to U.S. export restrictions, but at the end of 2024, the U.S. tightened its export controls again. Permission is required before it can be exported to China, Hong Kong and Macao, resulting in Pfizer’s inventory loss of up to 4.5 billion U.S. dollars recognized at the beginning of this year. However, there has been a recent shift in U.S. policy, promising to speed up the issuance of export permits. The industry is optimistic that this move will help digest existing stocks and boost the supply chain boom.
According to industry estimates, the current total inventory of H20 wafers in Taiwan’s semiconductor supply chain is about 1 million, of which the finished wafers account for about 700,000. Since the wafer casting phase has been completed, there is still uncertainty about new orders in the short term. It is expected that the existing inventory will be mainly de-stocked, which will further drive the demand for server cooling and components.
In terms of cooling solutions, the H20 chip application server adopts air-cooled and water-cooled parallel design. Qihong specializes in air-cooled cooling systems, Shuanghong provides water-cooled modules, Jiance supplies heating pads and other components, and Jianke focuses on high-end fan modules. With the re-shipment of H20 chips, the revenue performance of Taiwan’s cooling supply chain in the second half of the year is expected to pick up significantly.
On the other hand, the market was once worried that CloudMatrix 384, a self-developed server in China, would affect H20 demand. The product uses Huawei’s self-made Ascend 910C chip, but the performance is only about one-third that of H20. The analysis pointed out that considering the performance gap, China’s major cloud service providers (CSPs) still have a high degree of willingness to purchase H20 chips, further stabilizing the profit trend of Huida’s supply chain.
In addition, it has been reported that Huida is expected to launch a new generation of B30 chips in the fourth quarter of this year. The specifications are close to H20, and the performance is slightly lower by 10% to 20%, but the price is more competitive, and it is estimated to be reduced by about 30% to 40%. The legal person predicts that the inventory of B30 chips will be 1.2 million, which is expected to inject stronger growth momentum into the cooling industry from 2026.
Overall, with the restart of H20 chip exports and the launch of new B30 products, the server market demand continues to grow steadily, and Taiwanese cooling manufacturers will continue to benefit, and the momentum of industrial operations is expected to rise steadily.
