Nvidia Weighs Boosting H200 AI Chip Production: Report

• The chip giant is exploring this move following recent U.S. policy changes that allow exports of the H200 chip.
• The advanced chip is reportedly in high demand among Chinese firms. 
• The H200, launched in 2024, is currently the most advanced Nvidia chip allowed to be exported to China.

Nvidia Corp. (NVDA) is reportedly considering expanding production for its high-performance H200 AI chips as demand from Chinese companies surpasses current output limits. 

The chip giant is exploring this move following recent U.S. policy changes that allow exports of these advanced processors to China, albeit with a 25% fee. 

Chinese Demand Surge

According to a Reuters report, Chinese firms are placing such high demand on the chip that Nvidia is considering expanding production.

After the U.S. approved a conditional export, China summoned its biggest tech firms, including Alibaba (BABA), ByteDance, and Tencent (TCEHY), to discuss whether they would be permitted to purchase Nvidia’s H200 chips.

Currently, H200 chip production is limited as Nvidia focuses on its newer Blackwell and Rubin AI lines, according to the report. The H200, part of the previous Hopper generation, is manufactured by TSMC (TSM) using its 4nm process.

Nvidia stock traded 0.9% higher in Friday’s premarket. On Stocktwits, retail sentiment around the stock shifted to ‘neutral’ from ‘bearish’ territory the previous day, amid ‘low’ message volume levels. 

China’s Attempt To Boost Domestic Chip Production

Even with U.S. approval, Beijing is reportedly considering restrictions on how the H200 can be used domestically, as part of efforts to lessen dependence on high-end American GPUs. The H200, launched in 2024, is currently the most advanced Nvidia chip permitted for export to China.

In September, China’s Cyberspace Administration (CAC) instructed major firms to halt testing and purchasing Nvidia’s RTX Pro 6000D chip, which is built on the Blackwell architecture.

According to the Institute for Progress (IFP), the H200 chip is nearly six times more powerful than the H20. 

NVDA stock has gained over 34% year-to-date. 

Also See: Broadcom Gets Street’s Thumbs Up As AI Chip Demand, Backlog Drive Optimism – Retail Says No Way So Many Analysts Can Be Wrong

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