Nvidia considers expanding H200 production as China demand outpaces current chip output capacity

Nvidia considers increasing H200 chip output due to robust China demand, Reuters sources say

Nvidia has told Chinese clients it is evaluating adding production capacity for its powerful H200 AI chips after orders exceeded its current output level, according to two sources briefed on the matter. The move comes after U.S. President Donald Trump said on Tuesday the U.S. government would allow Nvidia to export H200 processors, its second-fastest AI chips, to China and collect a 25% fee on such sales. Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. They declined to be named as the discussions are private. Nvidia did not immediately reply to a Reuters request for comment. Major Chinese companies, including Alibaba and ByteDance, have already reached out to Nvidia this week about purchasing the H200 and are keen to place large orders, Reuters reported on Wednesday. However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200. Chinese officials convened emergency meetings on Wednesday to discuss the matter and will decide whether to allow it to be shipped into China, said one of the two sources and a third source. Very limited quantities of H200 chips are currently in production, Reuters reported on Wednesday, as the U.S. AI chip leader is focused on producing its most advanced Blackwell and upcoming Rubin lines. Supply of H200 chips has been a major concern for Chinese clients and they have reached out to Nvidia seeking clarity on this, sources said. As part of the briefing provided by Nvidia, the company has also given them guidance on current supply levels, said one of the first two people, without providing a specific number. The H200 went into mass deployment last year and is the fastest AI chip in Nvidia's previous Hopper generation. The chip is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process technology. TSMC and China's Ministry of Industry and Information Technology (MIIT) did not immediately reply to requests for comment. Chinese companies' strong demand for the H200 stems from the fact that it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded chip from Nvidia tailored 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 promote its own domestic AI chip industry. As domestic chip companies have yet to produce products that match the H200, there have been concerns that allowing the H200 into China could stymie the industry. "Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators," said Nori Chiou, investment director at White Oak Capital Partners. "I'm already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis," he said, adding Chinese AI demand exceeds the capacity of local production. During the emergency meetings, there was a proposal to require each H200 purchase to be bundled with a certain ratio of domestic chips, one of the first two sources and a third source said. For Nvidia, adding new capacity is also challenging at a time when it is not only transitioning to Rubin but also competing with companies, including Alphabet's Google, for limited advanced chipmaking capacity from TSMC.

Nvidia H200 chips can now ship to China following Trump's ban lift

The White House has authorized the export of Nvidia H200 AI accelerators to China, attaching a 25% fee per shipment. According to reports, the decision was influenced by Huawei's rapid development of its Ascend 910C chips, particularly the CloudMatrix 384 system, which integrates 384 of these accelerators. Internal sources suggest that the US move aims to maintain American dominance in the global tech ecosystem while keeping the country's proprietary Blackwell and Rubin architectures restricted. Huawei's CloudMatrix 384 has been described as a "nuclear-level product" capable of delivering 300 petaflops of dense BF16 compute. It surpasses Nvidia's GB200 NVL72 system on certain performance metrics, highlighting its raw computational power. The system also provides 3.6 times more aggregate memory and over twice the memory bandwidth compared to Nvidia's platform. However, these gains come at the cost of nearly four times the power consumption, raising efficiency concerns. These accelerators have been deployed in Huawei data centers, where abundant electricity reduces the importance of energy efficiency. The company plans to scale Ascend 910C production to hundreds of thousands of units next year, with projections suggesting millions could be manufactured by 2026. Despite China's development of its own AI instruction set through CANN, Nvidia GPUs remain the preferred choice for many AI developers, including companies such as Deepseek. Huawei has made its CANN software for Ascend GPUs open source, offering multi-layer programming interfaces for AI applications. The move aims to challenge CUDA's nearly two-decade dominance, encouraging a domestic ecosystem that reduces reliance on American hardware. Early adoption remains uncertain, as CANN's ecosystem is still immature compared to the long-established CUDA platform. With the progress of Huawei, the US allegedly reviewed multiple scenarios, ranging from full export bans to attempts to overwhelm Huawei by flooding the market. The final decision represents a middle ground, balancing national security, global AI competitiveness, and economic interests. President Trump emphasized that authorized exports will support American jobs and manufacturing while retaining leverage over advanced AI technology. Nvidia's CEO, Jensen Huang, acknowledged uncertainty over whether Chinese customers would fully purchase H200 systems, noting a $5.5 billion revenue shortfall in AI chips earlier in 2025. The reversal, therefore, appears to be driven by Huawei's Ascend 910C performance trajectory, which poses a potential threat to US leadership in AI hardware. While exporting H200 chips allows the US to maintain influence over AI software ecosystems. It also reflects the recognition of China's growing capabilities in high-performance accelerators. Via Tom's Hardware

Exclusive-Nvidia Considers Increasing H200 Chip Output Due to Robust China Demand, Sources Say

Dec 12 (Reuters) - Nvidia has told Chinese clients it is evaluating adding production capacity for its powerful H200 AI chips after orders exceeded its current output level, according to two sources briefed on the matter. The move comes after U.S. President Donald Trump said on Tuesday the U.S. government would allow Nvidia to export H200 processors, its second-fastest AI chips, to China and collect a 25% fee on such sales. Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. They declined to be named as the discussions are private. Nvidia ⁠did not immediately reply to a Reuters' request for comment. Major Chinese companies including Alibaba and ByteDance have already reached out to Nvidia this week about purchasing the H200 and are keen to place large orders, Reuters reported on Wednesday. However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200. Chinese officials convened emergency meetings on Wednesday to discuss the matter and will decide whether to allow it to be shipped into China, said one of the two sources and a third source. Very limited quantities of H200 chips are currently in production, Reuters reported on Wednesday, as the U.S. AI ⁠chip leader is focused on producing its most advanced Blackwell and upcoming Rubin lines. CHINA PROMOTING ITS OWN AI INDUSTRY Supply of H200 chips has been a major concern for Chinese clients and they have reached out to Nvidia seeking clarity on this, sources said. As part of the briefing provided by Nvidia, the company has also given them guidance on current supply levels, said one of the first two people, without providing a specific number. The H200 went into mass deployment last year and is the fastest AI chip in Nvidia's previous Hopper generation. The chip is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process technology. TSMC and China's Ministry of Industry and Information Technology (MIIT) did not immediately reply to requests for comment. Chinese companies' strong demand for the H200 stems from the fact that it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded chip from Nvidia tailored 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 promote its own domestic AI chip industry. As domestic chip companies have yet to produce products that match the H200, there have been concerns that allowing the H200 into China could stymie the industry. "Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators," said Nori Chiou, investment director at White Oak Capital Partners. "I'm already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis," he said, adding Chinese AI demand exceeds the capacity of local production. During the emergency meetings, there was a proposal to require each H200 purchase to be bundled with a certain ratio of domestic chips, one of the first two sources and a third source said. For Nvidia, adding new capacity is also challenging at a time when it is not only transitioning to Rubin but also competing with companies including Alphabet's Google for limited advanced chipmaking capacity from TSMC. (Editing by Miyoung Kim and Susan Fenton)

Nvidia considers increasing H200 chip output due to robust China demand, sources say - The Economic Times

Nvidia has told Chinese clients it is evaluating adding production capacity for its powerful H200 AI chips after orders exceeded its current output level, according to two sources briefed on the matter. The move comes after US President Donald Trump said on Tuesday the US government would allow Nvidia to export H200 processors, its second-fastest AI chips, to China and collect a 25% fee on such sales. Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. They declined to be named as the discussions are private. "We are managing our supply chain to ensure that licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States," an Nvidia spokesperson said in a statement to Reuters after the story was published. Major Chinese companies including Alibaba and ByteDance have already reached out to Nvidia this week about purchasing the H200 and are keen to place large orders, Reuters reported on Wednesday. However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200. Chinese officials convened emergency meetings on Wednesday to discuss the matter and will decide whether to allow it to be shipped into China, said one of the two sources and a third source. Very limited quantities of H200 chips are currently in production, Reuters reported on Wednesday, as the U.S. AI chip leader is focused on producing its most advanced Blackwell and upcoming Rubin lines. China promoting own AI industry Supply of H200 chips has been a major concern for Chinese clients and they have reached out to Nvidia seeking clarity on this, sources said. As part of the briefing provided by Nvidia, the company has also given them guidance on current supply levels, said one of the first two people, without providing a specific number. The H200 went into mass deployment last year and is the fastest AI chip in Nvidia's previous Hopper generation. The chip is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process technology. TSMC and China's Ministry of Industry and Information Technology (MIIT) did not immediately reply to requests for comment. Chinese companies' strong demand for the H200 stems from the fact that it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded chip from Nvidia tailored 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 promote its own domestic AI chip industry. As domestic chip companies have yet to produce products that match the H200, there have been concerns that allowing the H200 into China could stymie the industry. "Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators," said Nori Chiou, investment director at White Oak Capital Partners. "I'm already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis," he said, adding Chinese AI demand exceeds the capacity of local production. During the emergency meetings, there was a proposal to require each H200 purchase to be bundled with a certain ratio of domestic chips, one of the first two sources and a third source said. For Nvidia, adding new capacity is also challenging at a time when it is not only transitioning to Rubin but also competing with companies including Alphabet's Google for limited advanced chipmaking capacity from TSMC.

Nvidia Eyes Bigger AI Chip Output After China Orders Flood In - NVIDIA (NASDAQ:NVDA)

Nvidia Corp. (NASDAQ:NVDA) is evaluating an expansion of production capacity for its H200 artificial intelligence chips after orders topped output as per its Chinese clients. U.S. President Donald Trump announced on Tuesday that Washington will allow Nvidia to export H200 processors to China, as long as the company pays a 25% fee on each sale. Chinese demand is so strong that Nvidia is leaning toward adding new capacity, Reuters reported Friday, citing familiar sources. Also Read: US Lawmakers Push Bill To Stop Trump From Easing China's Access To Next-Gen Nvidia, AMD AI Chips Major Chinese Customers Line Up Alibaba Group Holding Limited (NYSE:BABA) and ByteDance have already contacted Nvidia this week to place large orders, Reuters previously reported. However, Beijing has not yet approved any H200 imports. The H200 manufactured by Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) on its 4nm process remains the fastest chip from Nvidia's Hopper generation. Chinese officials held emergency meetings on Wednesday to evaluate whether to allow the shipments, according to sources. Analyst Commentary Bank of America Securities analyst Vivek Arya reaffirmed Nvidia as his top pick after a recent investor meeting. Arya said Nvidia continues to lead AI computing by a full generation, with current Large Language Models still trained on Hopper graphics processing units and Blackwell expected to deliver a 10x-15x performance jump when it arrives in early 2026. He noted that the next Vera Rubin platform remains on track for late 2026. Arya highlighted Nvidia's multi-year demand visibility, supported by at least $500 billion in expected sales across 2025-26 for Blackwell, Rubin, and networking products. He said partnerships with OpenAI and Anthropic add potential upside, and emphasized Nvidia's unmatched platform strength from central processing units and GPUs to scale-out systems and Compute Unified Device Architecture (CUDA) software. He added that China-related uncertainty persists as Nvidia evaluates potential H200 GPU exports under new U.S. rules. Nvidia became the first company to hit the $4.5 trillion mark in October as the AI demand fueled demand for its GPUs. NVDA Price Action: Nvidia shares were up 0.39% at $181.63 during premarket trading on Friday, according to Benzinga Pro data. Read Next: Nvidia's Smart Chips Could Soon Tell On Their Smugglers Image via Shutterstock NVDANVIDIA Corp$181.820.49%OverviewBABAAlibaba Group Holding Ltd$157.700.51%TSMTaiwan Semiconductor Manufacturing Co Ltd$303.00-0.61%Market News and Data brought to you by Benzinga APIs

Nvidia considers more H200 chip output on China demand, sources say

STORY: Nvidia is looking into adding production capacity for its powerful H200 AI chips. Sources said that's what the U.S. tech giant told Chinese clients after orders exceeded its current output level President Donald Trump said on Tuesday the U.S. government would allow Nvidia to export H200 processors to China - although it will collect a 25% fee on those sales. The H200 is Nvidia's second-fastest AI chip and the most powerful Chinese companies can currently access. A source said Nvidia is leaning toward adding new capacity as demand from China is so strong. Nvidia didn't immediately respond to a request for comment. Major Chinese companies including Alibaba and ByteDance have already reached out to Nvidia this week about buying the H200, and would both like to place large orders. But there are still uncertainties around the issue. The Chinese government hasn't yet given permission for any purchase of the H200. Beijing has also more recently pushed to promote its own domestic AI chip industry. A source said Chinese officials held emergency meetings on Wednesday to talk about the matter.

Nvidia considers increasing H200 chip output due to robust China demand, sources say

Dec 12 (Reuters) - Nvidia has told Chinese clients it is evaluating adding production capacity for its powerful H200 AI chips after orders exceeded its current output level, according to two sources briefed on the matter. The move comes after U.S. President Donald Trump said on Tuesday the U.S. government would allow Nvidia to export H200 processors, its second-fastest AI chips, to China and collect a 25% fee on such sales. Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. They declined to be named as the discussions are private. Nvidia did not immediately reply to a Reuters' request for comment. Major Chinese companies including Alibaba and ByteDance have already reached out to Nvidia this week about purchasing the H200 and are keen to place large orders, Reuters reported on Wednesday. However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200. Chinese officials convened emergency meetings on Wednesday to discuss the matter and will decide whether to allow it to be shipped into China, said one of the two sources and a third source. Very limited quantities of H200 chips are currently in production, Reuters reported on Wednesday, as the U.S. AI chip leader is focused on producing its most advanced Blackwell and upcoming Rubin lines. CHINA PROMOTING ITS OWN AI INDUSTRY Supply of H200 chips has been a major concern for Chinese clients and they have reached out to Nvidia seeking clarity on this, sources said. As part of the briefing provided by Nvidia, the company has also given them guidance on current supply levels, said one of the first two people, without providing a specific number. The H200 went into mass deployment last year and is the fastest AI chip in Nvidia's previous Hopper generation. The chip is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process technology. TSMC and China's Ministry of Industry and Information Technology (MIIT) did not immediately reply to requests for comment. Chinese companies' strong demand for the H200 stems from the fact that it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded chip from Nvidia tailored 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 promote its own domestic AI chip industry. As domestic chip companies have yet to produce products that match the H200, there have been concerns that allowing the H200 into China could stymie the industry. "Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators," said Nori Chiou, investment director at White Oak Capital Partners. "I'm already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis," he said, adding Chinese AI demand exceeds the capacity of local production. During the emergency meetings, there was a proposal to require each H200 purchase to be bundled with a certain ratio of domestic chips, one of the first two sources and a third source said. For Nvidia, adding new capacity is also challenging at a time when it is not only transitioning to Rubin but also competing with companies including Alphabet's Google for limited advanced chipmaking capacity from TSMC.