Nvidia is ramping up production of its powerful H200 AI chips after receiving approval from President Donald Trump to sell the processors to “approved customers” in China. The move follows explosive demand from Chinese tech companies, prompting Nvidia to request a significant production increase from Taiwan Semiconductor Manufacturing Co. (TSMC), according to Reuters.
Sources say Nvidia has asked TSMC to begin producing the extra chips starting in the second quarter of 2026. Although exact order volumes remain undisclosed, the surge in Chinese demand could further strain the already tight global supply of advanced AI processors. The H200 is considered a major upgrade over existing chips and is reportedly priced at around $27,000 per unit for Chinese clients.
The Trump administration’s conditional approval allows U.S. chipmakers to sell their high-performance AI chips to select overseas buyers—while the U.S. government collects 25% of the sales revenue. In a Truth Social post, President Trump explained that Chinese President Xi Jinping had “responded positively” to the arrangement. Trump highlighted the deal as a win for American workers, manufacturing, and taxpayers.
Initial shipments of the H200 are expected to arrive in China ahead of the Lunar New Year in mid-February. Nvidia plans to fulfill early demand using existing inventory while ramping up output through TSMC. Though Chinese officials have not yet fully signed off on the imports, sources suggest they are unlikely to block them, as domestic manufacturers currently lack an H200 equivalent.
The deal also applies to other U.S. chipmakers, including AMD and Intel, as the Department of Commerce finalizes the terms. The decision is part of a broader strategy to maintain American leadership in AI while monetizing access for foreign buyers—especially in competitive markets like China.
As tensions escalate in the global race for AI dominance, experts warn that maintaining a technological edge is critical. Wynton Hall, Breitbart News’ social media director and author of the forthcoming book Code Red: The Left, the Right, China, and the Race to Control AI, stressed the importance of outpacing China in AI development.
