Nvidia may increase H200 AI chip output amid high demand from Chinese companies including Alibaba, ByteDance: Report

United States chip major Nvidia is considering increasing production capacity for its H200 artificial intelligence chips as demand for the product from Chinese companies exceeds present output, Reuters reported citing sources.
Responding to Reuters queries, a spokesperson for Nvidia said, “We are managing our supply chain to ensure that licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States.”
TSMC and China's Ministry of Industry and Information Technology (MIIT) did not immediately respond to queries, it added.
Strong demand from China pushes Nvidia to increase capacity
One source told the publication that demand from Chinese companies is so strong that Nvidia may add new capacity. Among the buyers is China's e-commerce giant Alibaba and Douyin (TikTok) owner ByteDance. As per a previous Reuters report, the companies contacted Nvidia for large order purchase of the H200 chips this week.
This comes after US President Donald Trump on 9 December permitted CEO Jensen Huang's company to export its second fastest AI chips, the H200 processors, to China for a 25% sales fee.
Eye now on Chinese govt nod
However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200, the report added. Sources told the agency that Chinese officials had that emergency meetings on 10 December to discuss the issue.
Till date, only limited number of H200 chips are in production as the company was focused on its Blackwell and Rubin chips. The sources said that Chinese clients have reached out to the company about the supply concerns.
Sources also said that the company gave clients guidance on current supply levels without providing a specific number.
About Nvidia's H200 chips
Launched into mass deployment in 2024, the H200 AI chip is manufactured by TSMC using its 4nm manufacturing process technology.
Demand is strong as Nvidia's H200 is 6x stronger than its H20 that was tailored for release in the Chinese market in 2023.
Nori Chiou, investment director at White Oak Capital Partners told the agency, “Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators. I'm already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis.”
He added that Chinese AI demand exceeds the capacity of local production.
(With inputs from Reuters)