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Nvidia’s market share in China’s AI chip market dropped to 34% in H1 2026 due to US export restrictions, while Huawei expanded its presence. Total AI accelerator shipments hit 2.008 million units, with non-GPU sales surpassing GPUs for the first time, according to ET Markets.

Nvidia’s China AI Chip Market Share Falls to 34% as Huawei Gains

Nvidia’s share of China’s AI chip market fell to 34% in the first half of 2026, down from prior levels, as US export restrictions curbed its access to the market. Total AI accelerator shipments in China reached 2.008 million units, with non-GPU shipments overtaking GPU sales for the first time. GPU shipments declined 26% to 991,000 units, while Nvidia shipped 678,000 AI accelerators in China, down 44% year-over-year. Huawei shipped 572,000 units, up from 300,000 a year earlier, capturing 28% of the market. IDC forecasts total AI accelerator shipments in China to grow 19% in 2026, even as GPU shipments decline 9%.

The shift reflects China’s push to develop domestic semiconductor capabilities amid US export restrictions. Non-GPU chips gained traction due to system-level integration priorities over individual processor performance. Nvidia’s reliance on China’s AI market is now constrained, while Huawei and other local firms benefit from government support and reduced foreign technology dependency.

Huawei and Chinese chipmakers like Alibaba’s T-Head, Cambricon, and Baidu’s Kunlunxin are directly benefiting from increased market share. Nine of 11 Chinese chipmakers tracked by IDC increased shipments year-over-year. However, Nvidia faces risks from continued export restrictions, while Chinese firms risk over-reliance on non-GPU architectures, which may lack scalability for large-scale AI training.

Opportunities for Huawei and other domestic players include expanding market share through government-backed production and reduced foreign reliance. Non-GPU architectures may gain long-term traction in specialized AI applications, though their broader success remains uncertain.

IDC expects total AI accelerator shipments in China to grow 19% in 2026, with GPU shipments declining 9%.

Nvidia’s 34% market share in China’s AI chip market signals a shift toward domestic alternatives, but the long-term success of non-GPU architectures remains uncertain.

Topics: AI Chip Market, Semiconductor Industry, China Technology, US Export Restrictions, AI Accelerators, Domestic Production, Huawei, Nvidia, Semiconductor Market Share

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Source: ET Markets