Nvidia’s China Chip Market Return Faces Domestic Competition Amid U.S. Eased Restrictions

Nvidia is poised to re-enter China's semiconductor market with its H20 chips after U.S. export restrictions were relaxed. The TRUMP administration recently greenlit the move, mandating a fully compliant China-specific chip design. Yet, analysts at Bernstein project a steep decline in Nvidia's AI chip dominance—from 66% market share in 2024 to 54% by 2025—as local players like Huawei and Hygon gain traction.

The vacuum left by Nvidia's temporary exit accelerated China's shift toward domestic AI processors. Bernstein forecasts homegrown alternatives will capture 55% of the market by 2027, up from just 17% in 2023. "Customers diverted to Chinese suppliers during the H20 ban may not fully return," notes Daniel Newman of The Futurum Group, underscoring the geopolitical Ripple effects of tech decoupling.

CEO Jensen Huang continues lobbying for expanded access, warning that export curbs undermine U.S. technological leadership. Rhodium Group's Rera Goujon concurs, framing participation in China's market as critical for maintaining geopolitical influence. The battleground now hinges on whether Nvidia's compliance-driven H20 can outmaneuver China's rising silicon sovereignty.