Nvidia is under pressure to deliver after Chinese tech giants flooded it with orders for over 2 million H200 chips.
But here’s the problem: Nvidia only has 700,000 units available right now, so it had to go back to its main foundry partner, TSMC, asking them to speed up production. Three people familiar with the situation allegedly told Reuters that TSMC has been asked to start making more H200 units, with production expected to begin by the second quarter of 2026.
The order rush could strain global AI chip supply again. While Nvidia tries to satisfy Chinese demand, it still has to support customers elsewhere. Things are even riskier because Beijing hasn’t approved the chips for import.
Cryptopolitan reported in November that President Donald Trump’s administration lifted the U.S. export ban, allowing H200 shipments to China, but with a 25% fee.
Chinese firms order millions of chips as Nvidia balances supply gaps
The talks with TSMC, as well as the size and price of Chinese orders, have not been reported before. Nvidia has priced the H200 chips at around $27,000 each, depending on the buyer and order size.
Two sources said the company will offer two chip variants to Chinese customers: the standalone H200 and the GH200 Grace Hopper superchip, which combines the Grace CPU with the Hopper GPU.
Of the 700,000 units Nvidia currently has, about 100,000 are GH200s, with the rest being H200. The first deliveries will come from this existing inventory and are scheduled to reach clients before the Lunar New Year holiday in mid-February. Additional supply will follow once TSMC ramps up.
Chinese firms view the H200 as a serious step up from what they can currently access. The now-blocked H20, a weaker chip made specifically for the Chinese market, is no longer available after Beijing banned it. But the H200 delivers roughly six times the performance, according to people familiar with the matter.
The eight-chip module is priced at about 1.5 million yuan, more than the H20’s 1.2 million yuan price tag. Even so, it’s still cheaper than gray-market options, which are going for over 1.75 million yuan.
ByteDance is already gearing up to spend 100 billion yuan on Nvidia’s chips in 2026, up from 85 billion yuan in 2025, if Chinese regulators approve the H200 imports.
Beijing still undecided on greenlighting incoming chip shipments
Despite the U.S. now allowing H200 exports, Chinese regulators haven’t given the all-clear. They’re worried that letting in more advanced foreign chips could slow progress in China’s own semiconductor sector. Officials haven’t blocked the shipments, but they haven’t signed off either.
Local chipmakers have built products that match the H20, but nothing yet rivals the H200. One idea that’s reportedly being discussed in Beijing is to tie every imported H200 chip to a mandatory purchase of a set amount of locally made chips.
This plan would let China’s domestic players stay in the game while letting internet giants like ByteDance keep scaling up.
Nvidia responded to a request for comment saying it manages its supply chain actively. A company spokesperson added, “Licensed sales of the H200 to authorised customers in China will have no impact on our ability to supply customers in the United States.”
The spokesperson also reportedly said, “China is a highly competitive market with rapidly growing local chip suppliers. Blocking all U.S. exports undercut our national and economic security and only benefited foreign competition.”
The H200 is part of Nvidia’s Hopper architecture and is made using TSMC’s 4-nanometer process. Even though Nvidia is also working on newer chips like Blackwell and the upcoming Rubin, this sudden surge in Chinese demand is pushing it to expand H200 output fast.
Sources said Nvidia hasn’t finalized exactly how many more chips it’ll ask TSMC to build, but the target is to keep up with massive demand while avoiding deeper supply shortages in other regions.
That balance just got a lot trickier.
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