Nvidia has halted production of H200 AI chips destined for China, reallocating capacity at TSMC to its next-generation Vera Rubin processors. The move signals the US chipmaker no longer expects significant sales in China amid ongoing export control battles between Washington and Beijing. The H200, compliant with current US restrictions, was previously in high demand from Chinese clients.

Nvidia had lobbied both governments for approval to sell H200 chips, with CEO Jensen Huang announcing in January that production was ramping up to meet expected orders exceeding 1 million units. However, the approval process stalled as the US State Department pushed for tougher restrictions on advanced semiconductor sales to China. Beijing has also signaled potential import curbs to protect domestic chipmakers.

Nvidia has already produced approximately 250,000 H200 chips, with existing inventory expected to cover limited orders if approved. The company's CFO Colette Kress noted on a recent earnings call that while some H200 products received US approval, no revenue has been generated and the import outlook remains uncertain. The reallocation to Vera Rubin production reflects Nvidia's strategic pivot toward markets where demand is guaranteed.