Nvidia halts China-bound H200 production and shifts TSMC capacity

Nvidia has halted production of its H200 artificial intelligence chips intended for the Chinese market. The company redirected manufacturing capacity at TSMC to its next-generation Vera Rubin platform. The Financial Times reported that regulatory barriers in both the United States and China continue to cloud prospects for sales to Chinese customers. The shift suggests Nvidia no longer expects significant demand for the processors in China in the near term. Months of uncertainty over export approvals from Washington and potential restrictions in Beijing prompted the decision. The H200 had been positioned to comply with US export controls on advanced semiconductors. Vera Rubin, unveiled earlier this year, represents the company's latest chip architecture designed to support more complex AI systems. It is expected to see strong demand from major US technology companies, including OpenAI and Google. One person familiar with the plans said Nvidia had to move on to what it could achieve with certainty amid a shortage of supply for its advanced chips. Nvidia had previously lobbied both Washington and Beijing to allow sales of H200 chips in China. After US President Donald Trump indicated in December that such sales could be permitted, the company began ramping up production in anticipation of orders from Chinese customers. It had expected demand of more than one million units from China. During an earnings call last week, Nvidia CFO Colette Kress said the US government had granted licenses allowing small amounts of H200 chips to be shipped to China, but the company had not yet generated revenue from those approvals. She added that Nvidia does not know whether any imports will be allowed into China. A US Commerce Department official told Reuters last month that none of Nvidia's H200 chips had been sold to Chinese customers despite export licenses. Nvidia has already produced about 250,000 H200 chips. If both Washington and Beijing ultimately allow only limited orders, the existing inventory could be sufficient to meet demand. Nvidia declined to comment on the report, while TSMC also declined to comment when contacted by Reuters.