Key Takeaway:
Nvidia's China market share for data-Centre AI chips fell to 34% in the first half of 2026, according to IDC data seen by Reuters, compared to a dominant position in previous years.
Shipments of Nvidia's AI accelerators dropped 44% year-on-year to 678,000 units in the first half of 2026, reflecting the company's loss of ground to other suppliers.
The US imposed export restrictions on China that prevented the sale of many of Nvidia's most advanced chips to the country.
Chinese companies are being encouraged to switch to homegrown alternatives, with Huawei at the forefront of the effort, and are required to get approval from Beijing to import even restricted Nvidia chips.
Nvidia's CEO said the restrictions represented a policy failure, arguing that a US company had been forced to hand over a $50 billion market to Huawei.
Huawei Hits 28% of China's AI Chip Market as Nvidia Slips
Nvidia’s share of China’s data centre AI semiconductor market fell to 34% in the first half of 2026, with shipments dropping 44% year-on-year to 678,000 accelerators, according to IDC figures seen by Reuters. The slump in the graphics chipmaker’s fortunes has been driven by Washington banning China’s access to its most powerful chips, restricting what it can legally sell to the country, and Beijing promoting homegrown alternatives and persuading Chinese firms to obtain permission to import even compliant Nvidia semiconductors. The restrictions, says CEO Jensen Huang, have forced an American company to give up a $50 billion market to Huawei – though IDC did not say if its 34% figure included cutting-edge B200 and B300 chips that are banned but have been smuggled into the country.
Huawei was the big winner, shipping 572,000 accelerators up from over 300,000 a year earlier. – to gain 28% of the overall market. It was not the only beneficiary, with Alibaba’s T-Head claiming 7%, Cambricon 5%, Baidu’s Kunlunxin 4% and Hygon 3%, with nine of the eleven Chinese chipmakers monitored by IDC expanding shipments year-on-year.
The market itself is evolving, with total shipments of accelerators climbing to 2.008 million units but GPU volumes, the chips used to train AI models – falling 26% to 991,000 as China eligible supply remained tight, while other AI accelerators, specialized chips used for running trained models, soared nearly 80% to 1.016 million, overtaking GPUs by volume.
Huawei, T-Head, Kunlunxin and Cambricon supplied 95% of that category, which is gaining traction with government agencies, internet firms and telecoms operators.(IDC) says competition is moving beyond raw performance of a single chip to overall system performance – how well they perform in large computing systems, and predicts total Chinese accelerator shipments will rise 19% this year even as GPU shipments fall.
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