NVIDIA wants TSMC to make its H200 chips for China
What's the story
NVIDIA is racing to meet the surging demand for its H200 artificial intelligence (AI) chips from Chinese tech firms. To do so, the company has approached Taiwan Semiconductor Manufacturing Company (TSMC), a major contract manufacturer. According to Reuters, Chinese tech companies have placed orders for over two million H200 chips for 2026. However, NVIDIA currently has only 700,000 units in stock.
Production increase
NVIDIA's H200 chip production ramp-up
The exact number of additional chips NVIDIA plans to order from TSMC is still unclear. However, a source has confirmed that the company has asked TSMC to start production of these extra chips, with work expected to begin in Q2 2026. This move raises concerns over a potential tightening in global AI chip supplies as NVIDIA balances strong Chinese demand with constrained supplies elsewhere.
Approval status
H200 chip sales to China still pending approval
Notably, NVIDIA's plan to ramp up production comes with some risks. This is because Beijing has not yet approved any shipments of H200 chips. The Donald Trump administration recently permitted exports of the H200 to China, but it remains uncertain how this will affect NVIDIA's operations and its ability to meet Chinese demand while serving other markets.
Pricing details
NVIDIA's pricing strategy for H200 chips in China
NVIDIA has decided which H200 variants it will sell to Chinese customers and is pricing them at around $27,000 per chip. The company said that licensed sales of the H200 to authorized customers in China won't affect its ability to supply customers in the US.
Market response
Chinese companies' interest in NVIDIA's H200 chips
The bulk of the over two million chip orders for 2026 has come from major Chinese internet companies. They see the H200 as a major upgrade over existing chips. Of NVIDIA's current 700,000-unit inventory, around 100,000 are GH200 Grace Hopper superchips that combine NVIDIA's Grace CPU with Hopper GPU architecture. Both variants will be offered to Chinese clients at a price that is attractive compared to gray market alternatives.