NVIDIA Considers Expanding H200 Chips Production as Demand in China Soars
In Focus
- NVIDIA is facing surging demand for H200 chips in China
- Chinese government hasn’t approved H200 importation yet
- President Donald Trump said he could allow H200 chip exports to China
NVIDIA has informed its Chinese customers that it is exploring possibilities of expanding its H200 AI chip production. According to Reuters, the U.S. chipmaker took this step after client orders surpassed its current output levels. Sources close to the company say demand for NVIDIA’s H200 in China is extremely high, causing the company to consider increasing its production capacity.
Huge H200 Chip Orders Expected from Chinese Firms
Major Chinese firms like ByteDance and Alibaba have already contacted the chipmaker about purchasing the chips and plan to place huge orders. Despite the high demand, Chinese authorities haven’t approved importation of the chips.
On December 10, 2025, government officials held an emergency meeting to deliberate on the matter and are yet to make a decision on whether to allow importation of the chips to China. Currently, NVIDIA has limited stock of H200 chips as its focus is on production of Blackwell AI chips, whose demand is also high, and its upcoming Rubin processors.
NVIDIA is considering increasing H200 output following President Donald Trump’s comments about allowing the company to export H200 chips, which are NVIDIA’s second-fastest GPUs, to China. The U.S. government will collect a 25% levy from such sales. NVIDIA commenced mass deployment of H200 processors in 2024.
What is Driving China’s Demand for H200 Chips?
H200 processors are the fastest of the company’s Hopper generation chips and are manufactured by TSMC using its 4nm technology. China’s demand for NVIDIA’s H200 chips is fueled by the fact that the GPUs are the most powerful ones they can access currently. H200 processors are six times more powerful than H20 chips, which the U.S. government licensed for export to China earlier this year.
“H200 compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators. I’m already observing many Cloud Service Providers and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis,” Investment Director at White Oak Capital Partners Nori Chiou said as stated by Reuters.
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China’s Focus on Local AI Chip Industry
President Trump’s latest decision on exportation of H200 chips to China comes when Beijing is seeking to grow the domestic AI chip industry. Already, Huawei has produced the Ascend 910C, an AI chip that is very similar to NVIDIA’s H100. However, Chinese companies are yet to manufacture GPUs that can match the H200.
This raises concerns that allowing importation of the American chips could impede local industry growth. Chinese officials have been exploring a plan requiring every H200 purchase to include a specific amount of locally produced chips.
Meanwhile, NVIDIA is experiencing difficulties in expanding H200 production due to the shift toward Rubin chip production. The company is also facing growing competition from firms like Google for TSMC’s scarce advanced chipmaking resources.
