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Huawei captures nearly 30 percent of China AI chip market as domestic alternatives rise
Tuesday, January 20, 2026 at 07:42 PM
Domestic Chinese AI chip companies like Moore Threads are gaining ground as Huawei captures nearly 30% of the domestic market. While U.S. export restrictions target Nvidia, China is accelerating its semiconductor self-sufficiency efforts despite potential shifts in U.S. export licensing policies.
Context
Huawei has surged to capture nearly 30% of China’s AI chip market, capitalizing on strict U.S. export restrictions and Beijing’s aggressive push for technological self-reliance. Domestic alternatives like the Ascend 910C are seeing rapid adoption among giants such as Alibaba and DeepSeek, while emerging local players like Moore Threads and Cambricon gain significant traction. Cambricon recently reached an $88 billion valuation, signaling strong investor confidence as it aims to triple output to challenge high-end American silicon.
This shift coincides with a major U.S. policy pivot. In January 2026, the Trump administration approved NVIDIA H200 exports to China, though these shipments are subject to a 25% tariff and strict volume caps. Despite this easing, the competitive window for U.S. vendors is narrowing. Industry analysts project NVIDIA’s market share in China could drop to just 8% by 2026 as local production grows at a 74% CAGR, moving toward total domestic supply-demand parity by 2028.
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