New Delhi: Nvidia has reported that it is evaluating plans to increase production capacity for its H200 AI chips after the company received orders from Chinese clients that exceeded current output levels. The move follows President Donald Trump’s announcement this week that the US will enable the export of the H200 to China, provided the US government collects a 25% fee on each sale. Citing industry sources, the news agency stated that the demand is so robust that Nvidia is leaning toward adding new capacity to satisfy the market.
Chinese firms, which include Alibaba and ByteDance, have already reached out to Nvidia this week, expressing interest in placing large-scale orders. The H200, which went into mass deployment last year, is the fastest chip in Nvidia’s Hopper generation and is Nvidia’s second-fastest AI processor. It is manufactured by TSMC using its advanced 4nm process technology. Despite the US approval, the Chinese government has not yet given the green light to the purchases. Some reports also stated that the Chinese officials held emergency meetings to discuss whether the influx of H200 chips might hamper the growth of the domestic AI chip industry.
To protect the local manufacturers, one proposal under discussion would require Chinese companies to bundle H200 purchases with the specific ratio of the domestically produced chips. Increasing H200 output presents a logistical challenge for Nvidia because there are minimal quantities in production as the company has shifted its primary focus to its newest Blackwell architecture and the upcoming Rubin line. However, Nvidia must compete with the other tech giants, such as Alphabet’s Google, for the limited advanced manufacturing capacity at TSMC.
