Nvidia considers H200 production ramp ahead of China demand, report says

Core Viewpoint - Nvidia is considering increasing the production of H200 chips due to strong demand from China, although there are uncertainties regarding manufacturing capacity and actual demand from the Chinese market [1][4]. Group 1: Manufacturing Capacity - Nvidia's H200 chip utilizes an older manufacturing process compared to its newer Blackwell and Ruben chips, which may allow for increased production without competing for capacity at TSMC [2]. - Semi analysis estimates that Nvidia sold 1 million H20 chips to China in 2024 while ramping up production of newer chips without causing bottlenecks [2]. - Ramping up H200 production would require shifting resources rather than simply scaling up, indicating potential challenges in meeting demand [4]. Group 2: Demand from China - The Chinese government has not yet approved imports of the H200 chips and has prioritized domestic suppliers like Huawei and Capricon, excluding Nvidia from their procurement list [5]. - Despite potential short-term purchases of H200 chips, China's focus on self-reliance and local alternatives raises questions about sustained demand for Nvidia's products [5]. - Morgan Stanley estimates that every 1 million H200 units could generate $1.3 billion in foundry revenue for TSMC, suggesting that analyst estimates for Nvidia may need to be adjusted based on actual demand [4].