NVIDIA's ambitions for China are glooming down with each day, as a new report indicates the AI giant is now looking to scale back H200 production in favour of ramping up Vera Rubin production.
NVIDIA Plans to Shift H200 Production Towards Vera Rubin, as it Prefers 'Consistency' Over Revenue
We have reported extensively on the NVIDIA-China saga in the past as well, and one of the more common trends in these stories is that both NVIDIA and China seem to be running in cycles, trying to catch each other. We'll discuss this aspect further ahead, but for now, according to a Financial Times report, NVIDIA has halted production of the H200 AI chips, which were initially intended for the Chinese market. This comes after Jensen's extensive efforts to bring revenue from Chinese hyperscalers back into NVIDIA's finances, and the latest report clearly indicates that Team Green is now 'fed up' with the situation.
Instead of waiting in a limbo, Nvidia has to move on to what it can achieve with certainty especially when there’s a shortage of supply for its advanced stuff. This could in a way accelerate the Vera Rubin delivery and roll out.
- Source via Financial Times
It's important to note that NVIDIA initially factored in tremendous demand for their H200 AI chips coming in from China, with figures scaling up to 'millions of units'. The chipmaker had contacted supply chain partners to gear up for tremendous demand, specifically requesting that TSMC adjust production lines to capitalize on it. However, NVIDIA's optimism hasn't lasted long, as it was recently reported that the US administration is planning to limit H200 volume to 75,000 per customer, a figure far below what the company had been preparing for.
It appears that NVIDIA's morale towards China, especially after the H200 approval, has died down, and the firm now intends to allocate its China capacity to Vera Rubin, given that the latter architecture is in high demand from global hyperscalers. NVIDIA's strategy here appears simple: the firm wants to prioritize certainty over expanding its revenue frontiers, and this makes sense given that Team Green operates a complex supply chain that requires consistency. By essentially moulding its plans to suit what China or the US wants, NVIDIA is leaving its partners confused.
While the NVIDIA-China saga hasn't entirely concluded, the likely conclusion is that Team Green will stick to addressing customer demands other than those from China, at least until the political landscape becomes consistent.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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