China's Domestic AI Chip Share Expected to Reach 90% by 2026, Huawei Poised to Surpass Nvidia
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TrendForce forecasts China's domestic share of the high-end AI chip market will reach nearly 90% in 2026; Bernstein expects Nvidia's China share to plunge from ~40% to roughly 8% — Huawei is shifting from challenger to market leader.
The forecast doubled in six months — what changed?
In December 2025, TrendForce estimated domestic chip share at roughly 50%, with imports at about 30%. The latest forecast jumps to nearly 90%.
This means → the shift is not gradual substitution but accelerated displacement — imports are shrinking from a third to roughly a tenth.
Bernstein's call aligns: Nvidia's China AI semiconductor share drops from ~40% in 2025 to ~8% in 2026, while Huawei's share is expected to exceed 50%.
Who is driving domestic chip volumes?
The supply chain is advancing along two tracks: Huawei and Cambricon are scaling AI accelerator shipments, while Alibaba, Baidu, and Tencent are ramping custom ASICs — application-specific chips designed for particular AI tasks, unlike general-purpose GPUs.
Huawei plans to ship roughly 750,000 Ascend 950PR accelerators in 2026. In H1 2025, domestic accelerators already held ~35% of the Chinese market; full-year shipments reached ~1.65 million units, or 41% share.
This reflects a market that has moved past the "can it work?" stage into volume deployment.
How fast is compute demand growing?
China's intelligent computing capacity hit 1.59 million PFLOPS at end-2025, then rose to 1.88 million PFLOPS by March 2026 — a quarterly jump of roughly 18%.
Combined 2026 capex for ByteDance, Tencent, Alibaba, and Baidu is projected to rise over 80% year-on-year, most of it flowing into AI data centers.
In plain terms = model training and inference appetite is surging so fast that imported GPUs alone can no longer fill the gap — domestic chips are absorbing the incremental demand.
Nvidia's deepest moat — the software ecosystem — is it still holding?
Nvidia's most durable advantage is not hardware speed but CUDA and the ecosystem of models, operators, and developer tools built around it. Domestic accelerators are hardware-capable, but model migration still requires heavy engineering.
The gap is narrowing fast: after DeepSeek V4 launched, at least eight domestic chip vendors announced compatibility plans. After the V4 Flash release, over 100 companies achieved Day-0 integration within days.
Meituan's LongCat-2.0 model was trained and run entirely on domestic compute, peaking at over 50,000 domestic accelerator cards. This means → a leading model has been built from scratch without any Nvidia dependency.
What cards does Nvidia have left to play?
Nvidia is reportedly preparing an RTX Pro 5000 with GDDR7 memory for the China market, positioned at a lower tier. The earlier RTX 6000D also carried performance caps.
China may consider lifting import restrictions on Nvidia's H200, but supply-chain checks show actual shipments remain highly uncertain.
In plain terms = the products Nvidia can sell into China keep getting weaker, and signals about easing restrictions have questionable odds of materializing.
After 2026, can this share hold?
If the forecasts prove right, 2026 marks a turning point — the first year domestic share commands an overwhelming lead in China's high-end AI chip market.
The key variable is sustained catch-up in software ecosystem: scaling hardware is the easier part; getting developers and model teams to fully migrate onto domestic platforms is what determines whether share solidifies beyond 2027.
This reflects a deeper competitive logic: the chip race is shifting from "whose hardware is faster" to "whose ecosystem is stickier."
Content is for reference only, not financial advice.