Nvidia (NVDA) is weighing whether to increase production of its H200 AI chip after demand from China exceeded current supply. The move follows a decision by the Trump administration to allow exports of the H200 to China under a licensing system that includes a 25% fee.
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As a result, several large Chinese technology firms have already approached the company about placing sizable orders. These include Alibaba Group (BABA) and ByteDance, according to Reuters sources. Demand has been strong enough that Nvidia is now reviewing whether it can add capacity without disrupting supply to U.S. customers.
At the same time, Nvidia said it is managing its supply chain to ensure licensed sales to China do not affect deliveries elsewhere. However, supply remains tight, since the company is focused on newer chip lines and has limited H200 output today.
China Balances Access With Local Goals
Meanwhile, China has not yet approved the import of the H200. Officials held emergency talks this week to assess whether allowing the chip into the country could slow the growth of local chip makers. Domestic alternatives still lag the H200 in performance.
Because of this gap, many Chinese cloud firms and enterprise buyers are pressing for approval. They argue that demand for advanced computing already exceeds what local suppliers can deliver. Still, officials are considering conditions, including proposals that would require buyers to also purchase a set share of domestic chips alongside any H200 orders.
For Nvidia, the situation presents both opportunities and limits. China remains one of the largest sources of demand for advanced computing. However, adding capacity is not simple, since the H200 is made by Taiwan Semiconductor Manufacturing Company Limited (TSM) on advanced nodes that are already in high demand from global customers.
Overall, the situation shows how strong global demand remains for Nvidia chips, even for models that are no longer the newest. It also highlights how trade policy is shifting toward managed access rather than outright bans, with cost and control built into each deal.
Is NVDA Stock a Buy?
On the Street, Nvidia continues to hold the analysts’ backing with a Strong Buy consensus. The average NVDA stock price target is $258.45, pointing to a 47.67% upside from the current price.
