Nvidia's China shipments fall 44% as Huawei closes in with 28% market share

Key Facts

Nvidia's shipments of AI accelerators for data centers in China fell 44% year on year in the first half of 2026, according to IDC data reviewed by Reuters. The U.S. company shipped 678 thousand accelerators during the period, as its lead over Huawei in the Chinese market narrowed. Nvidia held a 34% market share by shipments, as the mix of products reaching data centers shifted. The decline in the company's shipments coincided with limited supplies of GPUs permitted for sale in China, according to the report. Meanwhile, shipments of other accelerators rose and surpassed GPUs by units shipped during the same period.

Huawei shipped 572 thousand AI accelerators in China in the first half of 2026, according to IDC data cited by Reuters. That compares with more than 300 thousand accelerators shipped by the company in the corresponding period of 2025, reflecting the expansion of its business in the sector. Huawei held a 28% share of China's data-center AI chip market, measured by shipments during the first half of the year. That placed the company behind Nvidia in the market, with its shipments rising from the corresponding period while those of its U.S. rival fell year on year. Huawei closed in on Nvidia in a market where total shipments reached 2.008 million units, including GPUs and other accelerators used in data centers.

GPU shipments in the Chinese market fell 26% year on year to 991 thousand units in the first half of 2026, according to the research firm. The report linked the decline to limited supplies of products permitted for sale in China, citing that factor to explain the contraction in shipments in this category. By contrast, shipments of other accelerators rose about 80% from the same period a year earlier to 1.016 million units. That increase gave them greater volume than GPUs in the Chinese market during the period covered by the report. The first half thus combined shrinking GPU shipments with growth in shipments of alternatives, as the balance of units shipped shifted toward the other category.

The market for non-GPU accelerators is concentrated among a group of Chinese companies, according to IDC's breakdown of the shipment mix in the first half of 2026. Huawei, T-Head, Kunlunxin and Cambricon together accounted for 95% of this category, according to the data reviewed by Reuters. In its assessment of the competitive landscape, the firm sees the focus shifting from individual chip performance to the efficiency of the system in which the chips operate. It used the term "system-level capabilities" in this context, pointing to the importance of interconnections between chips within computing clusters. According to this assessment, competition now encompasses the operating efficiency of groups of chips and their interconnections within a computing cluster, alongside the performance of each individual chip.

Against the backdrop of its expanding presence, Huawei said in an official statement that Ascend 950 systems had entered large-scale commercial use. The company described the status of these systems by saying they had "already entered large-scale commercial use," as part of its account of developments in its computing products. On the software side, it announced the CANN platform's transition to ongoing operation through an open-source community, according to the same statement. Huawei described the platform as "the foundation of the Ascend ecosystem," linking its role to the ecosystem of the same name. The company's announcement combines commercial use of Ascend systems with open community operation of its software platform, at a time when IDC identifies system efficiency and chip interconnections as areas of competition.

For 2026 as a whole, IDC expects total AI accelerator shipments in China to rise 19% from the previous year. Within that total, the firm expects GPU shipments to fall 9% year on year, combining growth in the overall market with a decline in this product category. On upcoming products, Huawei set the first quarter of 2027 as the target for Ascend 960 DT readiness, according to its official statement. The company said this was 3 quarters ahead of its original plan, bringing forward the announced timetable for the product. It also set the third quarter of 2027 for Ascend 960 PR readiness, a quarter ahead of its previous schedule, as part of its upcoming Ascend product timetable.