Chinese AI Chip Prices Surge 50% as Memory Shortage Hits Huawei

Chinese AI Chipmakers Raise Prices Amid Memory Crunch

Chinese AI chip manufacturers including Huawei Technologies and Cambricon have implemented sharp price increases for current and upcoming AI processors, driven by escalating costs for high-bandwidth memory (HBM) components. The price hikes underscore growing challenges for China's efforts to build domestic alternatives to Nvidia's AI chips.

Huawei has raised the indicated price of its Ascend 950DT accelerator card to above 250,000 yuan ($37,255), representing a 20% to 50% increase from quotes provided just two months earlier, according to sources familiar with the matter. The 950DT, Huawei's most advanced AI chip, is scheduled for release in the fourth quarter of 2026.

Beijing-based Cambricon has similarly repriced its next-generation chip, tentatively designated the 690, at 20% to 30% above previously indicated levels. Smaller competitors MetaX and Iluvatar CoreX have implemented comparable increases, sources said.

Why it matters

The price surge reveals how global HBM shortages are undermining China's strategic push for AI chip self-sufficiency. As Chinese companies pay several times the standard rate for gray-market memory components following U.S. export restrictions, the cost advantage domestic chips once held over restricted Nvidia products is eroding. This threatens to slow AI infrastructure buildout across China's tech sector at a critical moment for the industry.

Export Controls Drive Gray-Market Dependence

The pricing pressure stems from a worldwide shortage of HBM, a crucial component consisting of vertically stacked memory chips that enable AI processors to access large datasets at high speeds. The advanced HBM market is dominated by South Korea's SK Hynix and Samsung Electronics, along with U.S.-based Micron Technology.

Since Washington tightened controls on exports of certain advanced HBM products to China in December 2024, Chinese chipmakers have increasingly relied on gray-market channels to secure supplies. Such HBM typically costs several times what buyers outside China pay, and because memory accounts for a large share of an AI accelerator's production cost, the higher prices feed directly into finished cards.

Earlier-Generation Chips Also Affected

The price increases extend beyond next-generation products. Huawei's Ascend 950PR, which sold for roughly 60,000 yuan per card at the start of the year, now fetches more than 80,000 yuan—an increase of approximately 30%. The older Ascend 910C board has risen to more than 110,000 yuan from about 90,000 yuan earlier this year.

The shortage is forcing suppliers to reshuffle allocations. Iluvatar CoreX has doubled its GPU shipments to ByteDance to 100,000 units this year and has diverted GPUs earmarked for internal use to help meet ByteDance's needs, according to one source. Huawei is ByteDance's largest domestic supplier, followed by Cambricon and Iluvatar CoreX.

The price hikes increase the cost of building AI computing capacity and highlight a growing bottleneck for Chinese chipmakers, who had benefited from a void in China's $50 billion AI chip market after U.S. export controls restricted access to Nvidia's most advanced processors.

These details were first reported by Reuters.