Nvidia’s Strategic Pivot Gains Momentum with Key China Approval and Supply Chain Shifts

A significant regulatory barrier in the critical Chinese market has been cleared for Nvidia. Authorities in Beijing have granted approval for the import of a substantial volume of new AI chips, ending months of uncertainty and providing immediate clarity for revenue projections. This development coincides with a notable rebalancing in semiconductor supply chain dynamics and a strategic broadening of Nvidia's manufacturing partnerships.

Concurrent with its China breakthrough, Nvidia is poised to reconfigure the semiconductor hierarchy. Fresh industry data indicates that by 2026, Nvidia is expected to surpass Apple as the largest customer for the contract manufacturer TSMC. According to analyst estimates, Nvidia will generate approximately $33 billion in revenue for the Taiwanese foundry this year, accounting for roughly 22% of TSMC’s total business.

This projected volume eclipses that of smartphone giant Apple, whose TSMC order book is estimated at about $27 billion. For market observers, this is a definitive signal: the investment cycle in data centers and AI infrastructure is now a more powerful industry driver than traditional end-user devices.

Beijing Greenlights Major H200 Processor Shipments

The catalyst for the current news flow is the confirmed authorization from Chinese regulators for the first batch of Nvidia’s H200 processors. Based on reports from Reuters and The Wall Street Journal, major technology firms including ByteDance, Alibaba, and Tencent have received the green light to purchase over 400,000 of these high-performance chips.

This move suddenly unlocks considerable revenue potential following a period of regulatory blockage. Based on an estimated unit price of around $27,000, the approved tranche represents a volume of nearly $11 billion. While the U.S. government had issued export licenses under strict conditions—including a cap of 50% of U.S. sales volume—late last year, the recent approval from Beijing is necessary for these orders to convert into recognized revenue.

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Diversifying Production Through Intel Partnership

In a parallel strategic development, plans are emerging to widen Nvidia’s manufacturing base. Reports from DigiTimes suggest Nvidia is planning a collaboration with Intel for its upcoming "Feynman" GPU architecture, slated for 2028. Under this plan, Intel would manufacture the I/O dies and handle up to 25% of the chip packaging.

These plans align with a previously confirmed commitment from Nvidia toward Intel: in September 2025, Nvidia invested $5 billion in Intel shares. Together, these steps point toward a deepening industrial partnership designed to mitigate the risk of bottlenecks with any single manufacturing partner.

Market Response and Key Data Points

The combination of the China approval and robust sector data is providing a tailwind for the broader semiconductor segment. The market is also noting record orders at equipment suppliers like ASML (€13.2 billion in the fourth quarter) and memory maker SK Hynix.

• China Market Access: Authorization secured for over 400,000 H200 chips destined for Alibaba, Tencent, and ByteDance.
• Revenue Implication: The initial batch carries an approximate value of $11 billion.
• Supply Chain Shift: Nvidia forecast to become TSMC's top customer by 2026, driving an estimated $33 billion in revenue (22% share).
• Manufacturing Strategy: Planned division of future GPU production with Intel for the "Feynman" architecture starting in 2028.

On the stock market, this positive mix of news is reflected in a share price hovering near record levels. Nvidia shares closed yesterday at $187.28, trading less than 2% below their 52-week high.

Focus Turns to Execution and Forward Guidance

Attention now turns to the extent which the approved China orders will be reflected in forthcoming forecasts. During its next quarterly report on February 25, 2026, Nvidia is likely to provide concrete figures on how quickly H200 deliveries in China will translate into recognized revenue and order bookings. Equally in focus will be the medium-term capacity planning with TSMC and Intel’s role in manufacturing from the "Feynman" generation onward, as these factors will determine the sustainability of the current growth trajectory.