Nvidia scrambles to meet 2 million H200 AI chip orders from China as supply crunch intensifies

Exclusive: Nvidia sounds out TSMC on new H200 chip order as China demand jumps, sources say

Dec 31 (Reuters) - Nvidia (NVDA.O), opens new tab is scrambling to meet strong demand for its H200 artificial intelligence chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for 2026, while Nvidia currently holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said Nvidia has asked TSMC to begin production of the additional chips, and work is expected to start in the second quarter of 2026. The moves raise concerns over whether there could be further tightening in global AI chip supplies as Nvidia now has to strike the right balance between meeting robust Chinese demand and addressing constrained supplies elsewhere. They could also intensify risks for Nvidia, as Beijing has yet to greenlight any shipments of H200 chips. The administration of U.S. President Donald Trump only recently allowed exports of the H200 to China. The talks between Nvidia and TSMC and details of the Chinese demand have not been reported before. The pricing has also not been reported earlier - Nvidia has decided which H200 variants it will offer to Chinese clients and price them around $27,000 per chip, the sources said. Nvidia said in response to a request for comment that it continuously manages its supply chain. "Licensed sales of the H200 to authorised customers in China will have no impact on our ability to supply customers in the United States," a spokesperson said. "China is a highly competitive market with rapidly growing local chip suppliers. Blocking all U.S. exports undercut our national and economic security and only benefited foreign competition." TSMC declined to comment and China's Ministry of Industry and Information Technology did not immediately respond to a request for comment. Reuters spoke to five people for this story, who declined to be named as the discussions are private. The potential order would mark a significant expansion of H200 production at a time when Nvidia has been focused on ramping up its newer Blackwell and upcoming Rubin chip lines. The H200, part of Nvidia's previous-generation Hopper architecture, uses TSMC's 4-nanometer manufacturing process. Nvidia plans to fulfil initial orders from existing stock with the first batch of H200 chips expected to arrive before the Lunar New Year holiday in mid-February, Reuters reported earlier this month. CHINESE TECH GIANTS DRIVE DEMAND The bulk of the orders of over 2 million chips for 2026 has come from major Chinese internet companies, which view the H200 as a significant upgrade over chips currently available to them, two of the people said. Of Nvidia's current 700,000-unit inventory, around 100,000 are GH200 Grace Hopper superchips, which combine Nvidia's Grace CPU with the Hopper GPU architecture, while the remainder are standalone H200 chips, one of them said. Both variants will be offered to Chinese clients, the person said. While Nvidia has indicated a pricing ballpark to the Chinese customers, it would vary based on purchase volume and specific customer arrangements, said two of the people. An eight-chip module is expected to cost around 1.5 million yuan, making it slightly more expensive than the now-unavailable H20 module, which previously sold for around 1.2 million yuan, they said. However, given that the H200 delivers roughly six times the performance of the H20 - a downgraded chip Nvidia designed specifically for the Chinese market that was later blocked by Beijing from being shipped into China - the sources said Chinese internet firms view the pricing as attractive. The price also represents a roughly 15% discount compared to grey-market alternatives, which currently retail at over 1.75 million yuan, according to the sources. ByteDance plans to spend about 100 billion yuan on Nvidia's chips in 2026, up from roughly 85 billion yuan in 2025, if China allows H200 sales, the South China Morning Post reported on Wednesday, citing sources. REGULATORY UNCERTAINTY PERSISTS The planned shipments follow Trump's decision earlier this month to allow H200 sales to China with a 25% fee, reversing the Biden administration's ban on advanced AI chip exports to China. However, Chinese officials are still deciding whether to allow H200 imports amid concerns that access to advanced foreign chips could slow development of the domestic AI semiconductor industry. But they have not signaled immediate opposition. While Chinese chipmakers have managed to come up with products that rival the H20 in performance, there are not yet any equivalents of the H200. One proposal under consideration would require bundling each H200 purchase with a certain ratio of domestically produced chips, Reuters previously reported. Reporting by Liam Mo, Wen-Yee Lee and Brenda Goh; Editing by Muralikumar Anantharaman Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia sounds out TSMC on new H200 chip order as China demand jumps: Report

Nvidia faces a massive demand for its H200 AI chips from Chinese tech giants. The company is reportedly seeking to boost production with TSMC to meet orders for over two million chips in 2026. This move comes as regulatory approval from Beijing for these shipments remains pending. Chinese firms see the H200 as a significant upgrade, driving this substantial interest. Nvidia is scrambling to meet strong demand for its H200 artificial intelligence chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for 2026, while Nvidia currently holds just 700,000 units in stock, two of the people said. The exact ⁠additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said Nvidia has asked TSMC to begin production of the additional chips, and work is expected to start in the second quarter of 2026. The moves raise concerns over whether there could be further tightening in global AI chip supplies as Nvidia now has to strike the right balance between meeting robust Chinese demand and addressing constrained supplies elsewhere. They could also intensify risks for Nvidia, as Beijing has yet to greenlight any shipments of H200 chips. The administration of U.S. President Donald Trump only recently allowed exports of the H200 to China. The talks between Nvidia and TSMC and details of the Chinese demand have not been reported before. The pricing has also not been reported earlier - Nvidia has decided which H200 variants it will offer to Chinese clients and price them around $27,000 per chip, the sources said. Nvidia said in response to a request for comment that it continuously manages its supply chain. "Licensed sales of the H200 to authorised customers in China will have no impact on our ability to supply customers in the United States," a spokesperson said. "China is a highly competitive market with rapidly growing local chip suppliers. Blocking all U.S. exports undercut our national and economic security and only benefited foreign competition." TSMC declined to comment and China's Ministry of Industry and Information Technology did not immediately respond to a request for comment. Reuters spoke to five people for this story, who declined to be named as the discussions are private. The potential order would mark a significant expansion of H200 production at a time when Nvidia has been focused on ramping up its newer Blackwell and upcoming Rubin chip lines. The H200, part of Nvidia's previous-generation Hopper architecture, uses TSMC's 4-nanometer manufacturing process. Nvidia plans to fulfil initial orders from existing stock with the first batch of H200 chips expected to arrive before the Lunar New Year holiday in mid-February, Reuters reported earlier this month. Chinese tech giants drive demand The bulk of the orders of over 2 million chips for 2026 has come from major Chinese internet companies, which view the H200 as a significant upgrade over chips currently available to them, two of the people said. Of Nvidia's current 700,000-unit inventory, around 100,000 are GH200 Grace Hopper superchips, which combine Nvidia's Grace CPU with the Hopper GPU architecture, while the remainder are standalone H200 chips, one of them said. Both variants will be offered to Chinese clients, the person said. While Nvidia has indicated a pricing ballpark to the Chinese customers, it would vary based on purchase volume and specific customer arrangements, said two of the people. An eight-chip module is expected to cost around 1.5 million yuan, making it slightly more expensive than the now-unavailable H20 module, which previously sold for around 1.2 million yuan, they said. However, given that the H200 delivers roughly six times the performance of the H20 - a downgraded chip Nvidia designed specifically for ⁠the Chinese market that was later blocked by ⁠Beijing from being shipped into China - the sources said Chinese internet firms view the pricing as attractive. The price also represents a roughly 15% discount compared to grey-market alternatives, which currently retail at over 1.75 million yuan, according to the sources. ByteDance plans to spend about 100 billion yuan on Nvidia's chips in 2026, up from roughly 85 billion yuan in 2025, if China allows H200 sales, the South China Morning Post reported on Wednesday, citing sources. Regulatory uncertainty persistsThe planned shipments follow Trump's decision earlier this month to allow H200 sales to China with a 25% fee, reversing the Biden administration's ban on advanced AI chip exports to China. However, Chinese officials are still deciding whether to allow H200 imports amid concerns that access to advanced foreign chips could slow development of the domestic AI semiconductor industry. But they have not signaled immediate opposition. While Chinese chipmakers have managed to come up with products that rival the H20 in performance, there are not yet any equivalents of the H200. One proposal under consideration would require bundling each H200 purchase with a certain ratio of domestically produced chips, Reuters previously reported.

China's AI Appetite Pushes Nvidia Into A Supply Crunch - NVIDIA (NASDAQ:NVDA)

Global demand for artificial intelligence hardware is tightening supply across the industry, and Nvidia Corp. (NASDAQ:NVDA) is increasingly squeezed by strong Chinese demand, limited chip capacity, and regulatory uncertainty. China Demand Pressures H200 Supply Nvidia is racing to meet surging orders from Chinese technology companies for its H200 AI chips. To ease the strain, the company has urged Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) to increase production. Chinese customers have reportedly ordered more than 2 million H200 chips for 2026, creating a supply crunch for Nvidia, which had only 700,000 units available. Also Read: Nvidia Fuels Taiwan's High-Stakes AI Push Nvidia has already asked Taiwan Semiconductor to start building additional chips, with production work expected to begin in the second quarter of 2026, Reuters reported on Wednesday, citing unnamed sources familiar with the matter. Pricing, Policy, And ByteDance's Spending Plans Nvidia has set pricing for China-bound H200 variants at about $27,000 per chip, with prices varying by volume and customer terms. An eight-chip module could cost around 1.5 million yuan, above the prior H20 module's roughly 1.2 million yuan, but Chinese buyers view the price as attractive given the performance jump. TikTok parent ByteDance is ramping up its artificial intelligence spending and plans to allocate about 100 billion yuan ($14 billion) to Nvidia chips in 2026. Wall Street Stays Bullish On Nvidia's AI Lead Despite China-related uncertainty, Nvidia continues to draw strong backing from Wall Street. Bank of America Securities analyst Vivek Arya reiterated his bullish view following a recent investor meeting. Arya called Nvidia his top pick in the space. He said Nvidia maintains a full-generation advantage in AI, with today's large language models still trained on its Hopper GPUs and next-generation Blackwell systems expected to deliver a 10x-15x performance jump when they roll out in early 2026. The analyst said Nvidia has visibility into at least $500 billion in cumulative sales across 2025-26. While uncertainty remains around potential H200 GPU exports to China under evolving U.S. policy, Arya said it is too early to gauge the impact. He added that Nvidia's mid-70% gross margin outlook remains intact. In October, Nvidia became the first company to top the $4.5 trillion market cap, leapfrogging the likes of Apple Inc. (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT). NVDA Price Action: Nvidia shares were down 0.31% at $186.95 during premarket trading on Wednesday, according to Benzinga Pro data. Read Next: Nvidia Open-Sources AI That Helps Self-Driving Cars Think Like Humans Image by Saulo Ferreira Angelo via Shutterstock NVDANVIDIA Corp$186.84-0.37%OverviewAAPLApple Inc$272.13-0.35%MSFTMicrosoft Corp$487.28-0.04%TSMTaiwan Semiconductor Manufacturing Co Ltd$301.540.65%Market News and Data brought to you by Benzinga APIs

NVIDIA Needs a Supply Chain 'Miracle' From TSMC as China's H200 AI Chip Orders Overwhelm Supply, Triggering a Bottleneck

NVIDIA is reportedly facing gigantic demand for its Hopper H200 AI chips from Chinese customers, and the firm is now prompting TSMC to take 'desperate' supply chain measures. We have reported in the past on how newer solutions introduced in China by NVIDIA/AMD are garnering massive attention within Chinese hyperscalers, mainly because the region is in desperate need of compute power to fuel advancements in frontier AI models. According to a report by Reuters, NVIDIA has received orders for up to 2 million H200 chips for next year, while the company's current inventory stands at just 700,000 units. This suggests that NVIDIA and its supply chain partners will likely need to restart Hopper production, placing significant constraints on companies like TSMC. The moves raise concerns over whether there could be further tightening in global AI chip supplies as Nvidia now has to strike the right balance between meeting robust Chinese demand and addressing constrained supplies elsewhere. - Reuters NVIDIA's reliance on TSMC for foundry needs is biting them right now, given that the Taiwan chip giant is already facing bottlenecks in addressing demand for Blackwell and related products from hyperscalers worldwide. More importantly, the primary constraint for TSMC right now might not be semiconductor production, since the H200 does utilize TSMC's 4nm node, which is being produced in both Taiwan and the US, but the main bottleneck comes from CoWoS packaging, since the technology has been dominantly adopted by Hopper, Blackwell, and Blackwell Ultra products. Reuters estimates that the ASP of an H200 AI chip in China is around $27,000, which means that for a two-million shipment figure, you could estimate a revenue of $54 billion from China, far exceeding what NVIDIA had written off earlier when the export restrictions were implemented. The demand from Chinese customers is something that NVIDIA cannot ignore at present, but a more pressing question is whether the AI supply chain can actually meet the efforts needed to satisfy global demand. TSMC already faces an explosion in CapEX and labor shortages, yet partners are demanding more from the Taiwan giant. H200 AI chips are known to be six times more powerful compared to the H20 in training workloads, which is one of the reasons why China's AI industry is rushing to place orders. It would be interesting to see how the NVIDIA-China story evolves moving forward, as the current demand will induce massive pressure on the supply chain.

Nvidia said to approach Taiwan Semi to boost H200 production amid China surge: reports (NVDA:NASDAQ)

Nvidia (NVDA) has approached Taiwan Semiconductor (TSM) about increasing production of its H200 GPUs amid a surge in demand from China, Reuters reported. Chinese technology companies have placed orders to the tune of 2M H200 GPUs, whereas Nvidia only has 700,000 Increased production could enhance Nvidia's ability to fulfill large Chinese orders, which has already driven shares modestly higher in premarket trading. Chinese companies like ByteDance and Alibaba are investing heavily in AI compute, and orders for H200 GPUs reflect surging demand for advanced chips despite supply constraints and regulatory uncertainties. US and Chinese approvals or restrictions, including export controls, sales cuts, and potential import decisions by China, create significant regulatory risk for Nvidia's ability to sell and deliver these GPUs to Chinese clients.

Nvidia sounds out TSMC on new H200 chip order as China demand jumps

Nvidia is scrambling to meet strong demand for its H200 artificial intelligence chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for 2026, while Nvidia currently holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said Nvidia has asked TSMC to begin production of the additional chips, and work is expected to start in the second quarter of 2026. The moves raise concerns over whether there could be further tightening in global AI chip supplies as Nvidia now has to strike the right balance between meeting robust Chinese demand and addressing constrained supplies elsewhere. They could also intensify risks for Nvidia, as Beijing has yet to greenlight any shipments of H200 chips. The administration of U.S. President Donald Trump only recently allowed exports of the H200 to China. The talks between Nvidia and TSMC and details of the Chinese demand have not been reported before. The pricing has also not been reported earlier - Nvidia has decided which H200 variants it will offer to Chinese clients and price them around US$27,000 per chip, the sources said. Nvidia said in response to a request for comment that it continuously manages its supply chain. "Licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States," a spokesperson said. "China is a highly competitive market with rapidly growing local chip suppliers. Blocking all U.S. exports undercut our national and economic security and only benefited foreign competition." TSMC declined to comment and China's Ministry of Industry and Information Technology did not immediately respond to a request for comment. Reuters spoke to five people for this story, who declined to be named as the discussions are private. The potential order would mark a significant expansion of H200 production at a time when Nvidia has been focused on ramping up its newer Blackwell and upcoming Rubin chip lines. The H200, part of Nvidia's previous-generation Hopper architecture, uses TSMC's 4-nanometer manufacturing process. Nvidia plans to fulfill initial orders from existing stock with the first batch of H200 chips expected to arrive before the Lunar New Year holiday in mid-February, Reuters reported earlier this month. The bulk of the orders of over 2 million chips for 2026 has come from major Chinese internet companies, which view the H200 as a significant upgrade over chips currently available to them, two of the people said. Of Nvidia's current 700,000-unit inventory, around 100,000 are GH200 Grace Hopper superchips, which combine Nvidia's Grace CPU with the Hopper GPU architecture, while the remainder are standalone H200 chips, one of them said. Both variants will be offered to Chinese clients, the person said. While Nvidia has indicated a pricing ballpark to the Chinese customers, it would vary based on purchase volume and specific customer arrangements, said two of the people. An eight-chip module is expected to cost around 1.5 million yuan, making it slightly more expensive than the now-unavailable H20 module, which previously sold for around 1.2 million yuan, they said. However, given that the H200 delivers roughly six times the performance of the H20 - a downgraded chip Nvidia designed specifically for the Chinese market that was later blocked by Beijing from being shipped into China - the sources said Chinese internet firms view the pricing as attractive. The price also represents a roughly 15 per cent discount compared to grey-market alternatives, which currently retail at over 1.75 million yuan, according to the sources. ByteDance plans to spend about 100 billion yuan on Nvidia's chips in 2026, up from roughly 85 billion yuan in 2025, if China allows H200 sales, the South China Morning Post reported on Wednesday, citing sources. The planned shipments follow Trump's decision earlier this month to allow H200 sales to China with a 25 per cent fee, reversing the Biden administration's ban on advanced AI chip exports to China. However, Chinese officials are still deciding whether to allow H200 imports amid concerns that access to advanced foreign chips could slow development of the domestic AI semiconductor industry. But they have not signaled immediate opposition. While Chinese chipmakers have managed to come up with products that rival the H20 in performance, there are not yet any equivalents of the H200. One proposal under consideration would require bundling each H200 purchase with a certain ratio of domestically produced chips, Reuters previously reported.