Nvidia might not recover its market share in China
Photo drawing of Nvidia’s H20 chip.
VCG | Visual Chinese Group | Getty Images
NvidiaH20 chips are likely to return to China, but technology experts do not expect to be met with the same fans on the market in the light of new competition and regulatory examination.
Last month, the Trump administration assured that NVIDIA’s exports were effectively banned in April and allowed H20 chips to continue to sell. He also announced a new “completely compatible” chip for China.
The movement was seen as a great gain for the company, which marked billions of losses due to policy. However, although the H20s return to the Chinese market, it does not mean that Nvidia will regain its old market share, analysts warn.
In a recent report, Bernstein, a global stock research and intermediary company, estimates that NVIDIA’s AI Chip market share in China will drop from 66% to 54% in 2025.
Since Chinese AI chip manufacturers seize more of the exploding domestic market, this decrease owes only to the complications that continue to supply chip.
Bernstein’s report, said the increasing importance of Chinese players such as Huawei, Cambricon and Hygon, “US export controls created a unique opportunity for domestic AI processor vendors.” He said. “The localization rate of China’s AI chipset will rise from 17% to 55% in 2023.”
Other analysts, such as Futurum Group CEO Daniel Newman, were more promoted to the return of Nvidia in China. However, when H20 controls are available, China marked the Potential Market Share Erosion from NVIDIA customers who can achieve success with their competitors.
It should be noted that Bernstein’s forecasts assume that wider US chip restrictions will not change to a great extent. This creates a dynamic in which Chinese companies continue to develop and offer advanced chips and probably eroded the demand for old US offers.
Is it easier?
Before reclaiming H20 restrictions, Nvidia CEO Jensen Huang was lobbing for further access to China, claiming that export controls prevented US technology leadership.
Although Trump management officials say that return is part of the trade negotiations, analysts repeated the basic argument that NVIDIA should be alleviated for Chip controls for the Chinese market, and thus the US technology proposals should create more dependence on the Chinese market.
“The assumption is that the US technology companies can maintain and even expand the geopolitical leverage by keeping US technology companies in China.” He said.
One report Last month, Rhodium Group said that the management of this logic could move on a ” -moving scale” approach to export restrictions that can allow more access to China while continuing to raise Huawei and other Chinese squirrels.
However, although Chinese AI developers will be happy to have more access to Nvidia chips, according to Goujon, Beijing’s companies are not expected to slow down their efforts to direct their host AI infrastructure.
He said that China’s recent calls to Nvidia were a obvious signal of cyber space management, the intention of the state’s intention to intervene in the local AI infrastructure market.
New Beijing review
According to China’s cyber space administration, Nvidia met with Beijing officials on Thursday, including the Potential rear doors that allow the US parties to access or control them.
The Beijing’s movement appeared in response to new laws that require semiconductor companies such as NVIDIA proposed in the United States to include security mechanisms and location verification to their further chips. Nvidia then rejected that their chips had any “back door” that would allow external access or control.
According to Futurum’s Newman, Beijing’s movement was an attempt to create some hesitation among Chinese AI developers who wanted to buy new H20s.
“When China feels that its own technology is really competitive, and at some point, it wants to leave some arms in place to potentially restrict it at some point outside its AI chips.” He said.
Beijing had previously limited the work of American chip producers in China during the intense technology and trade tension between the two countries. For example, Micron Technology failed in a cyber security examination in 2023 and was later blocked from the critical IT infrastructure.
“The continuous complexity of China-US trade relations can bring more complications [for Nvidia] As the negotiations go on and China is trying to strengthen its own AI strategy, New Newman added.
