NVIDIA to increase H200 chip production amid China demand surge
What's the story
NVIDIA is considering increasing the production of its powerful H200 AI chips, due to a surge in demand from Chinese clients. The tech giant's move comes after US President Donald Trump announced that the government will permit NVIDIA to export H200 processors, its second-fastest AI chips, to China for a 25% fee on such sales.
Market response
Chinese companies show strong interest in H200 chips
The demand for the H200 chip from Chinese companies is so high that NVIDIA is considering adding new production capacity. Major Chinese firms like Alibaba and ByteDance have already approached NVIDIA this week to buy the H200, showing their eagerness to place large orders. However, it's worth noting that the Chinese government has not yet approved any purchase of these advanced chips.
Production challenges
H200 chip production and supply concerns
Currently, only a small number of H200 chips are being produced. This is because NVIDIA is focused on manufacturing its most advanced Blackwell and upcoming Rubin lines. The supply of these chips has been a major concern for Chinese clients who have sought clarity from NVIDIA on this issue.
Tech specs
H200 chip's performance and China's AI chip industry
The H200 chip, which went into mass deployment last year, is the fastest in NVIDIA's previous Hopper generation. It is manufactured by TSMC using the Taiwanese firm's 4nm manufacturing process technology. The strong demand from Chinese companies stems from the fact that this is easily the most powerful chip they can currently access.
Industry impact
Concerns over H200's impact on China's domestic chip industry
The decision on the H200 comes at a time when China is pushing to promote its own domestic AI chip industry. There are fears that allowing the H200 into China could stymie this effort, as local chip companies have yet to produce products that match the power of the H200.