Nvidia considers increasing H200 chip production for China due to high demand - Reuters

Nvidia has informed Chinese customers that it is evaluating the possibility of increasing production capacity for its powerful H200 artificial intelligence chips after orders exceeded current production levels, citing two sources familiar with the matter, Reuters reports, writes UNN.

Details

The move comes after US President Donald Trump said on Tuesday that the US government would allow Nvidia to export H200 processors, the second-fastest AI chips, to China and receive a 25% commission on such sales.

Demand for the chip from Chinese companies is so strong that Nvidia is leaning towards increasing new capacity, one of the sources said.

"We are managing our supply chain to ensure that licensed sales of H200 to authorized customers in China do not impact our ability to supply products to customers in the United States," an Nvidia spokesperson said in a statement to Reuters after the article was published.

Major Chinese companies, including Alibaba and ByteDance, have already approached Nvidia this week about purchasing H200 and are looking to place large orders, Reuters reported on Wednesday.

However, uncertainty remains as the Chinese government has not yet given the green light to any H200 purchase. Chinese officials convened emergency meetings on Wednesday to discuss the issue and decide whether to allow its shipment to China, one of the two sources and a third source said.

Very limited quantities of H200 chips are currently being produced, Reuters reported on Wednesday, as the US leader in AI chip manufacturing focuses on producing its most advanced Blackwell and upcoming Rubin lines.

H200 chip supplies have caused serious concern among Chinese customers, and they have approached Nvidia for clarification on the matter, sources said.

Addition

The H200 was widely adopted last year and is the fastest AI chip in Nvidia's previous-generation Hopper. The chip is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process. It is approximately six times more powerful than the H20, an Nvidia chip designed for the Chinese market that was released in late 2023.

Trump's decision on the H200 comes at a time when China is pushing to advance its own domestic AI chip industry. With domestic chip companies yet to release products similar to the H200, there have been concerns that allowing the H200 into China could slow down the industry.

For Nvidia, adding new capacity is a challenge at a time when it is not only transitioning to Rubin but also competing with companies like Alphabet's Google for limited advanced chip manufacturing capacity from TSMC, the publication writes.

Trump's team considers allowing Nvidia H200 chip sales to China21.11.25, 22:39 • 5062 views