Company Nvidia Faces Supply Squeeze as Chinese Orders Flood for H200 Chips

Company Nvidia is under intense pressure after Chinese technology giants placed orders totaling more than 2 million units of the H200 accelerator chip, while the company currently has only about 700,000 units available. According to three people familiar with the situation interviewed by Reuters, Company Nvidia has asked Company TSMC to accelerate production, with added manufacturing expected to begin by the second quarter of 2026. This sudden surge in demand threatens to strain global AI chip supply and forces difficult allocation choices for existing customers.

Key stock and production details: The 700,000-unit inventory comprises roughly 100,000 GH200 units (the combined Grace CPU + Hopper GPU superchip) with the remainder being standalone H200 chips. Company Nvidia has priced the H200 at approximately $27,000 each, though final prices vary by buyer and order size. Initial deliveries will be sourced from current inventory and are slated to reach customers before the Lunar New Year holiday in mid-February, while additional shipments will depend on Company TSMC's ramp-up schedule.

Regulatory and market friction: Although the U.S. export ban on the H200 was lifted under the administration of Mr. Donald Trump (with an associated 25% fee), Chinese regulators have not yet formally approved imports. Authorities in Beijing are weighing the impact of advanced foreign chips on domestic semiconductor development and are reportedly considering policies that would require imported H200 chips to be tied to mandatory purchases of local chips. This approach would aim to protect domestic manufacturers while allowing large internet firms to continue scaling.

Market dynamics and pricing: The H200 is viewed by Chinese firms as a significant performance upgrade compared with the now-blocked H20 model, delivering roughly six times the performance, according to sources. The H200 module is reportedly priced at about 1.5 million yuan, versus the H20's 1.2 million yuan; grey-market prices for similar capacity exceed 1.75 million yuan. Company Cryptopolitan and other outlets have reported that firms such as Company ByteDance are preparing to dramatically increase spending on Company Nvidia chips — up to 100 billion yuan in 2026 from 85 billion yuan in 2025 — contingent on regulatory approvals.

Technical context: The H200 belongs to Company Nvidia's Hopper architecture and is manufactured on Company TSMC's 4-nanometer process. While Company Nvidia continues development of newer architectures (including Blackwell and the upcoming Rubin), the urgent demand for H200 is forcing a near-term expansion of H200 output to prevent deeper shortages elsewhere.

Strategic and global implications: The rush for H200 chips highlights several strategic tensions: supply-chain concentration, geopolitical regulation, and the competitive balance between global and domestic chipmakers. For customers outside China, Company Nvidia insists licensed sales to authorized Chinese customers will not harm its ability to supply other regions. Nevertheless, such a massive shift in orders — if fulfilled rapidly — could create temporary bottlenecks and price inflation for AI accelerators worldwide.

Operational outlook: Sources say talks with Company TSMC are ongoing and that the exact number of additional H200 units to be produced has not been finalized. The priority is to scale production quickly while avoiding significant supply disruption in other markets. The coming months will determine whether production ramps as hoped and whether Beijing grants import approvals or imposes conditions that change the economics of these purchases.

What this means for stakeholders: For cloud providers, internet giants, and AI startups, the situation is a reminder to diversify hardware strategies and consider procurement timing. For investors and market analysts, the H200 order wave is a factor that could influence AI infrastructure costs and competitive positioning throughout 2026.