Full story
Market Share Shifts as Supply Constraints Tighten
Huawei rotating chairman Eric Xu declared at the 2026 Huawei Connect Conference that the company’s Ascend neural processing units have surpassed Nvidia accelerators in sales within China. Xu noted that while precise market share data for Nvidia is difficult to collect, available information indicates Huawei has taken the lead in the domestic AI hardware market.
This assertion aligns with estimates from Bernstein Research, which project Huawei will hold approximately 50 percent of China’s AI accelerator market in 2026. In contrast, Nvidia’s market share in the region is estimated to have dropped from roughly 40 percent to about 8 percent during the same period.
The shift in market dynamics is largely attributed to U.S. export controls that have restricted Chinese companies' access to advanced Nvidia chips. Xu acknowledged that Huawei’s chips currently trail competitors on raw performance metrics but emphasized that their supply is assured. This reliability has become a primary factor for Chinese buyers prioritizing consistent hardware availability over peak computational speed.
Production Targets and Technical Specifications
To meet growing domestic demand, Huawei has set aggressive production goals for its Ascend lineup. The company aims to produce approximately 600,000 Ascend 910C processors in 2026. Additionally, Huawei has accelerated the launch timeline for its next-generation hardware, scheduling the release of the Ascend 960DT chip for the first quarter of 2027, with the Ascend 960PR following in the third quarter.
The current flagship product, the Ascend 950PR, delivers 1.56 petaflops of FP4 compute power. It is equipped with either 112GB or 128GB of proprietary HiBL 1.0 high-bandwidth memory. Production capacity for the 950PR is targeted at 750,000 units in 2026.
Major technology firms have already committed to purchasing Huawei’s hardware. Reports indicate that AI developer DeepSeek ordered 160,000 Ascend chips for a data-center campus in Inner Mongolia. Similarly, ByteDance has committed billions of yuan to purchasing 950PR chips to support its infrastructure needs.
Compensating for Performance Gaps with Scale
Huawei is addressing the performance gap between its processors and Western competitors through large-scale system architecture. The company is deploying a 256,000-card Atlas 950 SuperCluster, which is capable of expanding toward one million NPUs. This approach aims to compensate for individual chip limitations by leveraging larger system scale.
Financial investment in this transition has been substantial. Huawei invested 121 billion yuan, approximately $18 billion, into research and development in the first half of 2026, representing more than a quarter of its sales.
Strategic Push for Semiconductor Independence
The competitive landscape is driving a broader strategic shift within the Chinese technology sector. Eric Xu stated that the path forward for the Chinese government, domestic industry, and Huawei is to push for full self-sufficiency in chips and the entire semiconductor value chain. This goal underscores the urgency behind Huawei's aggressive production targets and the willingness of major clients like ByteDance and DeepSeek to adopt alternative hardware solutions despite performance trade-offs.
