Nvidia faces a significant bottleneck in moving 600,000 H200 AI chips into mainland China due to Chinese government reluctance to approve large-scale imports. This has created a stockpile in Hong Kong and impacted pricing and sales dynamics across the region.
- 600,000 Nvidia H200 chips stuck in Hong Kong pending China approval
- Chinese firms encouraged to use domestic chips for AI inference
- Nvidia takes a $400M charge for unsold H200 stock and contracts
What happened
This impasse has constrained Nvidia's ability to fulfill its export licenses even after US regulatory conditions allowed limited sales starting late 2025. Nvidia disclosed in its latest quarterly report that H200 chip sales to China formed less than 1% of its data center revenue, and it recorded a $400 million charge related to unsold H200 inventory and purchase commitments.
Why it matters
China’s hesitation to fully embrace the H200 chip imports stems from a strategic push to prioritize homegrown semiconductor technology, especially for AI inference tasks where companies run models post-training. This policy limits the role of foreign chips like Nvidia’s H200 in the domestic AI ecosystem, influencing both technology adoption and supply chain dynamics.
The shortage of Nvidia’s H200 chips in China’s market has driven prices on the unofficial channels substantially higher. Single servers outfitted with eight H200 chips were reportedly being offered for over 6 million yuan by October 2026, approximately three times the price from a year earlier. More advanced Nvidia Blackwell chips, banned from sale in China, fetched prices exceeding 20 million yuan per server on these parallel markets.
What to watch next
Meanwhile, demand for Nvidia’s other products remains robust within China, as evidenced by recent orders exceeding 3 million RTX Pro graphics cards from major internet companies worth roughly $35 billion. The balance between domestic chip production ambitions and reliance on foreign technology will be critical to watch amid ongoing US-China export controls and geopolitical tech tensions.