By Khac Phu Nguyen
Publication Date: 2025-12-31 15:59:00
This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) has held discussions with Taiwan Semiconductor (NYSE:TSM) about potentially increasing production of its H200 GPUs as demand from China accelerates, according to Reuters. Sources cited by the report said Chinese technology companies have placed orders totaling around 2 million H200 GPUs, while Nvidia currently has roughly 700,000 units available, including about 100,000 GH200 Grace Hopper CPU-GPU combinations, with the remainder being H200 GPUs. While the exact scale of any additional production remains unclear, one source indicated that talks have already taken place and manufacturing could possibly begin as early as the second quarter of 2026.
The return of Nvidia’s higher-end chips could be welcomed by Chinese technology firms navigating supply constraints. Separately, the South China Morning Post reported that ByteDance intends to spend about $14 billion on Nvidia GPUs in 2026 to support its computing needs. At the same time, Tencent (TCEHY) reportedly has access to Nvidia’s Blackwell GPUs through a third party in Japan, while Alibaba (NYSE:BABA) has placed orders with AMD (NASDAQ:AMD) for some of its MI308 AI accelerators, underscoring how major Chinese players are diversifying sourcing strategies for advanced AI hardware.
Policy developments could still influence how much of this demand ultimately converts into shipments. Earlier this month, President…