Global demand for artificial intelligence hardware is tightening supply across the industry, and Nvidia Corp. (NASDAQ:NVDA) is increasingly squeezed by strong Chinese demand, limited chip capacity, and regulatory uncertainty.
China Demand Pressures H200 Supply
Nvidia is racing to meet surging orders from Chinese technology companies for its H200 AI chips. To ease the strain, the company has urged Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) to increase production.
Chinese customers have reportedly ordered more than 2 million H200 chips for 2026, creating a supply crunch for Nvidia, which had only 700,000 units available.
Also Read: Nvidia Fuels Taiwan’s High-Stakes AI Push
Nvidia has already asked Taiwan Semiconductor to start building additional chips, with production work expected to begin in the second quarter of 2026, Reuters reported on Wednesday, citing unnamed sources familiar with the matter.
Pricing, Policy, And ByteDance’s Spending Plans
Nvidia has set pricing for China-bound H200 variants at about $27,000 per chip, with prices varying by volume and customer terms.
An eight-chip module could cost around 1.5 million yuan, above the prior H20 module’s roughly 1.2 million yuan, but Chinese buyers view the price as attractive given the performance jump.
TikTok parent ByteDance is ramping up its artificial intelligence spending and plans to allocate about 100 billion yuan ($14 billion) to Nvidia chips in 2026.
Wall Street Stays Bullish On Nvidia’s AI Lead
Despite China-related uncertainty, Nvidia continues to draw strong backing from Wall Street.
Bank of America Securities analyst Vivek Arya reiterated his bullish view following a recent investor meeting. Arya called Nvidia his top pick in the space.
He said Nvidia maintains a full-generation advantage in AI, with today’s large language models still trained on its Hopper GPUs and next-generation Blackwell systems expected to deliver a 10x–15x performance jump when they roll out in early 2026.
The analyst said Nvidia has visibility into at least $500 billion in cumulative sales across 2025–26.
While uncertainty remains around potential H200 GPU exports to China under evolving U.S. policy, Arya said it is too early to gauge the impact.
He added that Nvidia’s mid-70% gross margin outlook remains intact.
In October, Nvidia became the first company to top the $4.5 trillion market cap, leapfrogging the likes of Apple Inc. (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT).
NVDA Price Action: Nvidia shares were down 0.31% at $186.95 during premarket trading on Wednesday, according to Benzinga Pro data.
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