Huawei ramps up AI chip production to fill in Nvidia's falling market share in China: report

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China-based Huawei plans to nearly double the production of its artificial intelligence chip, the 910C, in 2026 as it attempts to fill in the gaps left in the wake of Nvidia's (NASDAQ:NVDA [https://seekingalpha.com/symbol/NVDA]) dwindling shipments to the country, according to Bloomberg.

Huawei hopes to produce 600,000 of the chips next year, the report [https://www.bloomberg.com/news/articles/2025-09-29/huawei-to-double-output-of-top-ai-chip-as-nvidia-wavers-in-china] said, citing people familiar with the matter. Huawei is partnering with Semiconductor Manufacturing International, a partially state-owned foundry headquartered in Shanghai. Domestic companies such as Alibaba Group Holding (BABA [https://seekingalpha.com/symbol/BABA]) and DeepSeek (DEEPSEEK [https://seekingalpha.com/symbol/DEEPSEEK]) require advanced chips to train and run AI applications. These companies had been very reliant on Nvidia, which sold an estimated 1M H20 chips to mainland China in 2024.

However, during Nvidia's second quarter fiscal 2026 earnings call on August 27, Chief Financial Officer Colette Kress said their third quarter outlook includes zero shipments of H20 chips to China.

"China declined on a sequential basis to low single-digit percentage of data center revenue," Kress said. "Note, our Q3 outlook does not include H20 shipments to China customers."

CEO Jensen Huang stressed the potential of the Chinese market as he estimates it to be a $50B opportunity this year alone.

"And if it's $50B this year, you would expect it to grow, say, 50% per year," he said. "As the rest of the world's AI market is growing as well. It is the second largest computing market in the world, and it is also the home of AI researchers. About 50% of the world's AI researchers are in China. The vast majority of the leading open source models are created in China. And so it's fairly important, I think, for the American technology companies to be able to address that market."

"And so we just have to keep advocating the sensibility of and the importance of American tech companies to be able to lead and win the AI race and help make the American tech stack the global standard," he added.

Meanwhile, Huawei plans to expand on its Ascend 910 lineup, with the 950, 960 and 970 launching in phases through 2028, the report said. Even these upcoming chips significantly lag in performance versus Nvidia. For example, the Ascend 950 provides 6% of the performance compared to Nvidia's upcoming VR200.

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