Nvidia has approached Taiwan Semiconductor Manufacturing Co. (TSMC) to increase production of its H200 AI accelerator, a move that could add millions of high‑performance GPUs to the Chinese market. TSMC declined to comment on the request, but Reuters reports that the company is evaluating the feasibility of scaling its 4‑nanometer process to meet the demand.
Chinese technology firms—including ByteDance and Alibaba—have placed orders for more than 2 million H200 chips, with delivery scheduled for 2026. Nvidia currently holds roughly 700,000 units in inventory, so the new orders represent a substantial expansion of its supply chain commitments.
The U.S. has imposed export controls on advanced AI chips destined for China, and the sale of H200 units is subject to a 25 % revenue‑sharing agreement with the U.S. government. Beijing has not yet approved the imports, so the final shipment of the chips will depend on Chinese regulatory clearance.
TSMC’s advanced‑node capacity is already described as “significantly short of AI demand.” Even with a ramp‑up, the company will need to balance the H200 order against other high‑margin customers, but the additional wafer output is expected to lift its AI accelerator revenue and support a margin expansion driven by pricing power and operational leverage.
Management has highlighted the opportunity: CFO Wendell Huang said the company is “seeing strong demand for leading‑edge process technologies,” while CEO C.C. Wei expressed confidence in the AI megatrend. The order underscores TSMC’s role as the sole foundry for next‑generation AI chips and signals Nvidia’s continued reliance on TSMC’s advanced nodes as it expands its Hopper‑based product line while preparing for newer architectures such as Blackwell and Rubin.
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