Home / Business and Economy / Nvidia's China Comeback Faces Uphill Battle Amid Domestic Competition
Nvidia's China Comeback Faces Uphill Battle Amid Domestic Competition
4 Aug
Summary
- Nvidia's AI chip market share in China to drop from 66% to 54% by 2025
- Chinese AI chipmakers like Huawei, Cambricon, and Hygon seizing more of the booming domestic market
- U.S. export controls create opportunity for Chinese firms to develop advanced chips
As of August 4th, 2025, Nvidia's H20 chips are poised to make a comeback in the Chinese market, but industry experts do not expect the company to reclaim its previous level of dominance. The Trump administration had last month given Nvidia the green light to resume sales of its H20 chips to China, after their exports had been effectively banned in April.
While this move was seen as a significant win for Nvidia, which had flagged billions in losses due to the policy, the reality on the ground paints a more complex picture. According to a recent report by global equity research and brokerage firm Bernstein, Nvidia's AI chip market share in China is projected to drop from 66% in 2024 to just 54% by 2025.
This decline is not solely attributed to complications in resuming chip supply, but also to the rapid rise of Chinese AI chipmakers. Companies like Huawei, Cambricon, and Hygon have been seizing a larger share of the booming domestic market, taking advantage of the unique opportunity created by the U.S. export controls. Bernstein's report notes that the "localization ratio of China's AI chip market will surge from 17% in 2023 to 55% by 2027," as these domestic players continue to develop and offer advanced chips.
While some analysts, such as The Futurum Group CEO Daniel Newman, remain more optimistic about Nvidia's ability to bounce back in China, they also acknowledge the potential for market share erosion from Nvidia customers who may have found success with Chinese rivals during the H20 control period.
