US Curbs Cut Nvidia’s China AI Chip Share to 34% as Huawei Gains Ground

U.S. semiconductor export restrictions have eroded Nvidia Corp.’s share of China’s artificial intelligence chip market, while Chinese companies led by Huawei Technologies Co. are narrowing the gap.

Reuters reported on October 13, citing market research firm IDC, that Nvidia held a 34% share of China’s market for data-center AI accelerators in the first half of this year. Nvidia shipped 678,000 AI accelerators during the period, down 44% from a year earlier.

U.S. chip export controls are a key reason for Nvidia’s weaker position in China. The U.S. government has restricted exports of advanced AI semiconductors to China, limiting the products Nvidia can supply there. China’s government has also promoted the use of domestically produced chips, while requiring Chinese companies to obtain separate approval even when importing Nvidia products that comply with U.S. export rules.

Chinese chipmakers are quickly gaining market share. Huawei shipped 572,000 AI accelerators in the first half, up sharply from more than 300,000 a year earlier. Its market share reached 28%, narrowing the gap with Nvidia to 6 percentage points.

Alibaba Group Holding Ltd.’s chip-design subsidiary T-Head captured a 7% share, followed by Cambricon at 5%, Baidu Inc.’s Kunlunxin at 4% and Hygon at 3%. Of the 11 Chinese chip companies tracked by IDC, nine increased shipments from a year earlier.

Nvidia Chief Executive Officer Jensen Huang has repeatedly voiced concern about U.S. export controls. He has criticized the policy as ceding a roughly $50 billion Chinese AI chip market to Huawei. IDC did not disclose which Nvidia products were included in its market-share tally.

The product mix in China’s AI chip market is also changing. Total AI accelerator shipments in China reached 2.008 million units in the first half. Of that, graphics processing unit shipments fell 26% from a year earlier to 991,000 units, while non-GPU AI accelerators climbed nearly 80% to about 1.016 million units. Huawei, T-Head, Kunlunxin and Cambricon accounted for 95% of the non-GPU market.

IDC said efficiency in large-scale computing systems is emerging as a key competitive factor in China’s AI chip market, beyond the performance of individual chips. It forecast total AI accelerator shipments in China would rise 19% this year, while GPU shipments would fall 9%.