Nvidia’s China AI chip market share falls to 34% as Huawei gains ground: IDC

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.

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.

NVIDIA (NVDA) shares fell 1.6% after Microsoft announced scaling its Maia 300 AI chips. NVIDIA's AI GPU shipments to China dropped 44% YoY in H1 2026. TSMC's results are crucial for NVIDIA's production outlook. Hyperscalers' AI capex is a key demand driver for NVIDIA. The company is exploring investment in open-source startup Reflection AI.

Nvidia's share of China's AI chip market fell to 34% in H1 2026, down 44% YoY, due to U.S. export controls and competition from Huawei and other local firms, according to IDC data reported by Reuters. Nvidia shipped 678,000 AI data center chips in China during this period. Huawei led Chinese AI chip makers with a 28% market share.