NVIDIA H20 to See an 18% Price Hike!

  After NVIDIA secured the export license for its H20 chips to China by paying 15% of its sales to the Trump administration, analysts believe that NVIDIA should be able to pass on the costs to Chinese customers by raising the price by 18%. While this may cause a slight decline in gross profit margin, the impact is expected to be limited.

  Gene Munster, co-founder of Deepwater Asset Management, released a research report on the 16th local time, pointing out that the agreement between NVIDIA CEO Jensen Huang and Trump has opened a new "pay-to-play" model for accessing the Chinese market.

  Munster believes that NVIDIA's overall gross profit margin will remain largely unaffected, as the company should be able to pass on the costs of revenue sharing to Chinese customers. To maintain the gross profit amount, however, it would need to raise prices by 18%.

  The current Wall Street consensus is that NVIDIA's gross profit margin will reach 71% in 2026. If NVIDIA raises the price of H20 by 18% to preserve its gross profit amount, the gross profit margin for the H20 business will drop from 71% to 60%. Assuming H20 accounts for 15% of total revenue, this would bring NVIDIA's overall gross profit margin down from 71% to 69.3%.

  A complicating factor in calculating the gross profit margin is that the 15% revenue share to the U.S. government will also apply to the newly increased prices. Munster argues that while NVIDIA's gross profit margin will edge down, investors will focus on the gross profit amount rather than the margin, given that the impact stems from external political pressures.

  However, in the view of Xinzhixun, Munster's perspective is overly optimistic, as it fails to consider the awkward situation currently faced by H20 chips in the Chinese market. Until NVIDIA addresses concerns about potential "security issues" with its AI chips sold in China, state-owned enterprises or private companies engaged in government-related or national security-related businesses are unlikely to prioritize purchasing H20. This will inevitably affect H20's sales in China. If a product developed specifically for the Chinese market already faces sluggish sales domestically, raising its price further would only weaken its competitiveness and suppress sales even more.