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

Shares of AI chipmakers fell in Asia and U.S. premarket trading on Tuesday. SK Hynix and Samsung dropped 10.1% and 7.4%, respectively, while U.S. peers like Nvidia and AMD also declined. Broadcom's CEO warned about unrealistic AI investment expectations. Chinese chipmaker CXMT announced advancements in RAM chip technology, potentially challenging major rivals.

A Super Micro Computer contractor pleaded guilty to charges of illegally exporting Nvidia AI servers to China, violating U.S. export controls. The scheme involved $2.5B in servers, with $510M diverted to China. Super Micro denies knowledge, while Nvidia's CEO called for stronger compliance. The case may impact AI server supply chains and enforcement of U.S. chip controls.

Nvidia's share of China's AI chip market fell to 34% in H1 2026, while Huawei gained 28% market share, according to IDC data. Nvidia's shipments declined 44% due to US export restrictions, while Huawei and other Chinese firms increased shipments. Non-GPU AI chips overtook GPUs in volume, with domestic firms leading this segment. IDC expects China's AI chip shipments to grow 19% in 2026, despite a 9% decline in GPU shipments.

Nvidia's NVDA market share in China's AI chip sector dropped to 34% in H1 2026, per IDC, due to U.S. export limits and competition from Huawei. Nvidia's shipments fell 44% YoY, while Huawei's rose, capturing 28% of the market. China's total AI-accelerator shipments reached 2.008 million units.

Samsung and SK Hynix shares dropped 8% and 4% respectively, as Broadcom and Intel executives warned of financing constraints for AI infrastructure. Nvidia's China AI chip market share fell to 34% in H1 2026, while Huawei gained 28%, according to IDC. The comments triggered a sell-off in AI-linked stocks.

Nvidia (NVDA) reports that Chinese tech firms have purchased over 1 million of its gaming and workstation chips this year to address AI computing shortages, despite US export restrictions. The demand is driven by a supply gap in China's domestic AI chip market. Nvidia's fiscal 2026 revenue from China was $19.68 billion, with a significant increase in the July quarter. Oracle (ORCL) is benefiting from Chinese demand through leasing agreements for AI chips.