China's share of foreign AI chips fell from 90% in 2021 to below 60% by 2025, with Morgan Stanley projecting a further drop to 25% by 2030. Huawei is combining older production tools with advanced packaging and chip stacking to create Ascend chips that can replace NVIDIA hardware for certain AI tasks. While still behind NVIDIA's best chips by roughly four times compute, China's progress towards chip sovereignty is accelerating faster than anticipated.
China's domestic AI chip production is rapidly maturing despite export controls, creating a viable alternative to NVIDIA for some workloads and reducing foreign market access.