Nvidia may increase H200 AI chip output amid high demand from Chinese companies including Alibaba, ByteDance: Report
According to Reuters, citing sources, US chip giant Nvidia is considering increasing production capacity for H200 artificial intelligence chips because Chinese companies’ demand for the product exceeds current production.
“We manage our supply chain to ensure that licensed sales of the H200 to authorized customers in China do not impact our ability to supply customers in the United States,” an Nvidia spokesman said in response to questions from Reuters.
He added that TSMC and China’s Ministry of Industry and Information Technology (MIIT) did not immediately respond to questions.
Strong demand from China pushes Nvidia to increase capacity
A source told the publication that demand from Chinese companies is so strong that Nvidia may add new capacity. Buyers include China’s e-commerce giant Alibaba and Douyin (TikTok) owner ByteDance. According to an earlier Reuters report, the companies contacted Nvidia this week to place large orders of H200 chips.
This comes after US President Donald Trump on December 9 allowed CEO Jensen Huang’s company to export H200 processors, the second-fastest AI chip, to China for a 25% sales fee.
Now all eyes are on the approval of the Chinese government
However, the report stated that uncertainties continue as the Chinese government has not yet given the green light to any H200 purchase. Sources told the agency that Chinese officials held emergency meetings on December 10 to discuss the issue.
Since the company focused on Blackwell and Rubin chips, only a limited number of H200 chips were produced to date. Sources said Chinese customers have reached out to the company with supply concerns.
Sources also said the company is providing guidance to customers on current supply levels, without giving a specific number.
About Nvidia’s H200 chips
The H200 AI chip, which was introduced to mass use in 2024, is produced by TSMC using 4nm manufacturing process technology.
Demand is strong as Nvidia’s H200 is 6 times more powerful than the H20, which is designed to be released in the Chinese market in 2023.
Nori Chiou, investment director of White Oak Capital Partners, told the agency: “(H200) computing performance is about 2-3 times that of the most advanced domestically produced accelerators. I currently observe that many CSPs (Cloud Service Providers) and enterprise customers are aggressively placing large orders and lobbying the government to conditionally relax restrictions.”
He added that China’s demand for artificial intelligence exceeds local production capacity.
(With inputs from Reuters)
