Following approval by the Trump administration, Nvidia is ramping up production of H200 AI chips after China ordered over 2 million units, while the company holds only 700,000 in stock and seeks TSMC’s assistance to meet demand, according to Reuters.
The U.S. approval enabled exports of Nvidia’s H200 processors to China, prompting the immediate placement of a large order exceeding 2 million units by Chinese customers. This development occurs despite prior warnings from China and implementation of new measures aimed at preventing Nvidia chipsets from entering its market.
Nvidia currently maintains inventory of 700,000 H200 chipset units. This stock encompasses 100,000 GH200 Grace Hopper superchips alongside the remaining standard H200 processors. The company intends to ship both types of chips to fulfill portions of the Chinese orders.
To address the shortfall, Nvidia is engaging Taiwan Semiconductor Manufacturing Company (TSMC) to increase production capacity. TSMC plans to commence manufacturing the additional H200 chips in the second quarter of 2026. Nvidia has not revealed the precise quantity of extra H200 chipsets requested from TSMC.
Each H200 chip carries a price of $27,000 from the U.S. chipmaker. This valuation applies to sales directed toward authorized customers in China under the licensed export framework.
Nvidia addressed potential supply concerns in a statement: “Licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States. China is a highly competitive market with rapidly growing local chip suppliers. Blocking all U.S. exports undercuts our national and economic security and only benefits foreign competition.”
Global customers of Nvidia have expressed worries regarding the company’s capacity to allocate chips equitably between the United States and China amid the surge in Chinese demand. These concerns stem from the existing tight supply constraints highlighted by the current inventory levels.
China has not granted approval for Nvidia’s chipsets within its domestic AI market, leaving uncertain whether the accelerated H200 production efforts will ultimately assist Nvidia in penetrating that sector.
