This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) shares rose about 1% on Wednesday morning after the company approached Taiwan Semiconductor Manufacturing (NYSE:TSM) to expand production of its H200 AI chips.
Chinese technology firms have placed orders for more than 2 million H200 units for delivery in 2026, while Nvidia holds roughly 700,000 chips in current inventory. Production at TSMC is expected to start in the second quarter of next year.
The H200 is part of Nvidia’s Hopper architecture and uses TSMC’s 4-nanometer process. Details on exact volumes and pricing remain private, sources familiar with the matter said.
Nvidia plans to ship the first batch from existing stock before the Lunar New Year in mid-February. Prices are reported around $27,000 per chip, varying by customer and volume.
The expansion comes as Nvidia prepares its next-generation Blackwell and Rubin chips. Analysts note the move may further tighten global AI chip supplies, as strong Chinese demand competes with limited availability elsewhere.