Beijing: US chipmaker Nvidia has begun discussions with Taiwan Semiconductor Manufacturing Co to increase production of its H200 artificial intelligence chips after a sharp rise in demand from Chinese technology companies, according to sources familiar with the matter.
The talks come as Chinese firms place large orders for the H200 chip, which is used to train and run advanced AI systems. Sources say orders from China have crossed two million units, while Nvidia currently has fewer than one million chips available, putting pressure on its supply plans for 2026.
Industry sources say Nvidia is exploring additional production capacity at TSMC, with any new manufacturing likely to begin only from the second quarter of next year. The move reflects Nvidia’s effort to respond to strong interest from China while continuing to meet demand from other global markets.
The H200 chip is priced at around 27000 dollars per unit. An eight chip server module can cost about 1.5 million yuan, making it one of the most expensive but also most powerful AI products available to Chinese buyers.
Despite the strong demand, shipments to China still depend on regulatory approval. While the United States government has allowed exports of the H200 to China under certain conditions, Chinese authorities have not yet given full clearance for imports. Several Chinese technology firms are said to be lobbying Beijing, warning that delays could slow the country’s AI development.
At the same time, Chinese internet and technology companies are preparing for heavy spending on AI infrastructure in 2026. Recent reports indicate that major firms plan to invest billions of dollars in Nvidia chips if approvals are granted.
Nvidia has said that any additional sales to China would not reduce supplies to customers elsewhere. TSMC has declined to comment on the discussions.
The situation highlights the growing competition and urgency in the global AI race, where access to high end chips is becoming a key factor for technological growth, especially in markets like China.