Nvidia engages TSMC on extra H200 production as China demand jumps

Reuters reports Chinese technology companies have ordered more than 2 million H200 chips for 2026 while Nvidia holds about 700,000 in stock, and Nvidia has approached TSMC to discuss additional production with work reported to start in the second quarter of 2026.

Nvidia is seeking to increase production of its H200 artificial intelligence chips after strong orders from Chinese technology companies. Reuters reports those companies have placed orders for more than 2 million H200 chips for 2026 while Nvidia currently holds about 700,000 units in inventory. The article says Nvidia has sounded out contract manufacturer TSMC to ramp up production, with work reported to be expected to begin in the second quarter of 2026. These developments occur after a recent U.S. decision to allow H200 exports to China and while Chinese authorities continue to consider whether to permit imports. Key details: - Chinese technology companies have reportedly ordered more than 2 million H200 chips for 2026, versus about 700,000 units Nvidia has in stock. - Nvidia has asked TSMC to start additional H200 production, and sources said work is expected to begin in Q2 2026. - About 100,000 of Nvidia's current inventory are GH200 Grace Hopper superchips; the remainder are standalone H200 chips, and both variants are reported to be offered to Chinese clients. - Sources told Reuters Nvidia indicated H200 pricing around $27,000 per chip and an eight-chip module was noted at roughly 1.5 million yuan, which the article says is around a 15% discount to grey-market alternatives. - U.S. authorities recently authorised H200 exports to China with a 25% fee, but Chinese officials are still deciding whether to allow imports and have discussed measures such as bundling purchases with domestically produced chips. Summary: The reported talks between Nvidia and TSMC aim to expand H200 output to meet substantial Chinese orders while Nvidia also focuses on newer chip lines. Chinese regulatory approval for imports remains under consideration, Reuters reports, and initial customer orders are reported to be met from existing stock with the first batch expected before the Lunar New Year; TSMC work is reported to be scheduled to start in the second quarter of 2026.