Nvidia Eyes Higher H200 AI Chip Output on Rising Orders From China

According to Reuters, citing sources, American chip manufacturer Nvidia is thinking about expanding production capacity for its H200 artificial intelligence chips because demand for the product from Chinese enterprises surpasses current output.

In response to questions from Reuters, an Nvidia representative stated that the business is controlling its supply chain to guarantee that approved sales of the H200 to authorised clients in China won't affect its capacity to service consumers in the US. It further stated that questions were not quickly answered by TSMC or China's Ministry of Industry and Information Technology (MIIT).

Chinese Buyers on Full Throttle For Nvidia Chips

According to the media report, Nvidia is considering expanding its capacity in response to the increasing demand from Chinese enterprises. ByteDance, the owner of Douyin (TikTok), and China's e-commerce behemoth Alibaba are among the purchasers. According to an earlier Reuters story, the businesses reached out to Nvidia this week to place a significant order for the H200 chips. For a 25% sales fee, Jensen Huang's company would export its H200 processors, the second-fastest AI chips, to China.

The Chinese government has not yet approved any purchases of the H200, so there are still unknowns, the article continued. Chinese officials held emergency meetings to discuss the matter on December 10th, according to sources who spoke to the agency. Due to the company's concentration on its Blackwell and Rubin chips, only a small amount of H200 chips are currently being produced. According to the sources, the company has received enquiries from Chinese customers regarding supply issues. Additionally, according to sources, the business advised customers on the current supply levels without giving a precise figure.

What is so Special About Nvidia's H200 AI chip

White Oak Capital Partners' investment director, Nori Chiou, told Reuters that the H200's compute performance is around two to three times that of the most sophisticated domestic 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 said. He went on to say that local production cannot keep up with the demand for AI in China.