Nvidia Accelerates H200 Chip Production with TSMC Amid Surging Chinese Demand

Nvidia faces a critical supply shortage with only 700,000 H200 units currently available, prompting urgent talks with TSMC to accelerate production. The chipmaker aims to begin additional output by Q2 2026, according to three sources familiar with the matter. This scramble comes as Chinese firms place orders for millions of units despite Beijing's lack of import approval for the advanced chips.

The supply crunch risks destabilizing global AI chip availability. Nvidia must balance Chinese demand against commitments to other markets, compounded by the 25% fee imposed on H200 exports to China following the Trump administration's policy shift. Pricing remains steep at approximately $27,000 per unit, with variants including both standalone H200 and GH200 Grace Hopper superchips.

Initial deliveries from existing inventory—comprising 100,000 GH200s and 600,000 H200s—are slated for completion before Lunar New Year. The scale of Chinese orders and production negotiations with TSMC had not previously been disclosed, underscoring the geopolitical tightrope in semiconductor trade.