Huawei Set to Capture Half of China’s AI Chip Market by 2026, Report Says

Huawei is projected to secure a dominant position in China’s artificial intelligence semiconductor sector, potentially controlling half the market by 2026 as domestic production accelerates.

A new report by Bernstein Research indicates a dramatic shift in competitive dynamics, forecasting that the Shenzhen-based technology giant will significantly outperform foreign rivals in the coming year. While Nvidia Corp. currently holds approximately 39% of the Chinese market in 2025, its share is expected to shrink to single digits in 2026 as local vendors gain traction.

The research highlights an aggressive expansion in China’s domestic chip manufacturing capabilities. Analysts predict that local AI chip sales will grow at a compound annual growth rate of 74% over the next three years, allowing the country’s output to exceed domestic demand by 2028.

These findings suggest a rapid realignment of the semiconductor landscape, with US-based chipmakers facing eroding market share amid the rise of homegrown alternatives led by Huawei.

Reshaping Market Share

According to the data released by Bernstein Research, the market share landscape for AI chips in China is undergoing a sharp reversal. In 2025, Nvidia and Huawei are virtually tied, with Nvidia holding a 39% share and Huawei trailing closely with a comparable figure. However, the projections for 2026 show a distinct divergence.

The report estimates that Huawei’s market share will surge to 50% in 2026, cementing its status as the market leader. Conversely, Nvidia’s share is forecast to plummet to just 8% over the same period.

Other players are also expected to adjust to this new environment. AMD is projected to rank second with a 12% market share in 2026. Domestic competitors, including Cambricon and MetaX Integrated Circuits, are also identified as key participants, with Cambricon expected to take the third spot in the rankings.

Domestic Supply Acceleration

The report attributes these shifts to a broader trend of increasing self-sufficiency in China’s semiconductor sector. Bernstein Research notes that the rapid acceleration in local AI chip production capacity will likely drive domestic sales to rise significantly through 2028.

Projections indicate that the supply-demand ratio for Chinese AI semiconductors will improve substantially. While domestic supply is expected to cover 39% of demand in 2026, this figure is forecast to reach 104% by 2028, meaning China could produce more AI chips than it consumes domestically. Furthermore, sales figures are anticipated to see a 93% hike by 2028, underscoring the momentum behind local technology growth.