Analysis of the Impact of China's New Restrictions on Nvidia AI Chip Procurement

Based on the latest search results, I will provide you with a comprehensive analysis report on China’s new restrictions on Nvidia AI chip procurement and their impact on the global semiconductor supply chain and the competitive landscape of the AI chip market.

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From 2025 to early 2026, the rivalry between China and the US in the AI chip sector underwent dramatic changes [1][2]. On December 8, 2025, the US Department of Commerce announced the conditional approval of Nvidia H200 chip exports to China, ending the previous export restrictions on this chip [3]. However, this policy loosening quickly received a tough response from China.

According to January 2026 reports from Reuters and Agence France-Presse, the Chinese government convened a meeting with domestic tech enterprises, clearly instructing them not to purchase Nvidia H200 chips unless necessary [4][5]. A source revealed: “The official wording was very strict, essentially equivalent to an existing ban at present” [4]. Chinese customs has begun restricting the entry of Nvidia H200 chips, and only approves procurement under special circumstances (such as research projects in cooperation with universities) [4].

The Chinese Ministry of Foreign Affairs and the Chinese Embassy in the US have clearly stated their opposition to the politicization of technology trade, arguing that the US’s restrictive measures “undermine the stability of industrial and supply chains and are not in the common interests of both parties” [5]. Beijing is formulating relevant regulations requiring enterprises to procure a certain proportion of Chinese-made AI chips to support the development of local industries [4].

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China’s move to restrict Nvidia chip procurement marks that the Sino-US semiconductor supply chain is entering an era of “precision decoupling” [6]. According to estimates from the Boston Consulting Group, the cumulative global compliance costs caused by Sino-US tech decoupling may exceed $12 billion [6]. This trend is fundamentally reshaping the competitive landscape of the global semiconductor industry.

Impact Area	Specific Changes
Design Segment	China is accelerating the localization of EDA tools; Grandsoft has completed a 14nm independent full-process toolchain [6]
Manufacturing Segment	Restrictions on advanced processes have prompted China to focus on expanding mature process production capacity
Packaging and Testing	Advanced Chiplet packaging technology has become a key area for breakthroughs
Equipment and Materials	Localization of core equipment such as 12-inch CMP equipment and wafer-level bonding equipment is accelerating [7]

Market research firm TrendForce predicts that China’s restrictive measures will significantly change the global HBM (High Bandwidth Memory) supply and demand dynamics [6]:

• South Korean Manufacturers
  (Samsung, SK Hynix) will accelerate the transfer of production capacity to European and American customers
• Chinese Memory Enterprises
  are forced to accelerate the independent development of HBM technology
• The regional characteristics of the global semiconductor market will be further strengthened

For Nvidia, policy uncertainty in the Chinese market is having multiple impacts:

1. Supply Chain Adjustment Costs
   : To respond to policy changes, Nvidia needs to reconfigure its global production capacity and inventory
2. Ecosystem Risks
   : Once Chinese developers fully switch to domestic frameworks (such as Huawei CANN, Baidu PaddlePaddle), Nvidia’s dominant position in the CUDA ecosystem will be shaken [8]
3. Market Share Loss
   : According to Bloomberg Intelligence estimates, annual sales of the H200 in China could have reached $10 billion, but the boycott by Chinese enterprises has dashed this expectation [1]

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Nvidia is at the forefront of the Sino-US tech rivalry, and its position is increasingly difficult [5]. According to data from the Semiconductor Industry Association, global semiconductor sales reached $630.5 billion in 2024, with the US accounting for 50.4% of the market share, while China is the world’s largest market with rapid growth (20.1% growth in 2024) [9].

• Continue to strive for chip export licenses to China; CEO Jensen Huang stated that the Chinese market could reach a scale of $50 billion in the next three years [8]
• Maintain a limited market presence through custom-made chips (such as the H20)
• Emphasize that the US should recognize that “in the artificial intelligence race, the US is not the only country” [3]

China’s policy of restricting overseas chip procurement has objectively created historic development opportunities for local AI chip enterprises [8][10]:

Enterprise	Technical Route	Representative Product	Progress Status
Huawei	NPU Architecture	Ascend 910B/910C	Will launch the Ascend 950 series in 2026 [10]
Cambricon	Cloud-Edge-Device Integration	MLU590	The first domestic AI chip listed enterprise
Biren Technology	GPU Architecture	BR100	Passed the filing for Hong Kong Stock Exchange IPO
Moore Threads	CUDA-Compatible GPU	MUSA Architecture	Rose 425% on the first day of listing on the STAR Market [10]
Muxi	GPU Architecture	Product Series	Rose 693% on the first day of listing on the STAR Market [10]

• 2026 Q1: Ascend 950PR (using self-developed HBM)
• 2026 Q4: Ascend 950DT
• 2027 Q4: Ascend 960
• 2028 Q4: Ascend 970

It is reported that the microarchitecture of the Ascend 950PR/DT will be upgraded to SIMD/SIMT, with computing power reaching 1 PFLOPS (FP8)/2 PFLOPS (FP4) [10].

Different from the “brute-force computing” in the large model training stage, the inference stage emphasizes processing efficiency and energy efficiency ratio per unit cost [11]. This transformation provides differentiated competition opportunities for Chinese local chip enterprises:

• CloudWalk Technology
  focuses on the AI inference track to build a “Chinese version of TPU”
• International cases such as
  Google TPU
  and
  Amazon Inferentia
  prove the market potential of inference chips
• Chinese enterprises are at a similar starting line with global competitors in the inference chip track [11]

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According to reports, China is considering launching a special support program for the semiconductor industry with a scale of 200 billion to 500 billion yuan (approximately $28 billion-$70 billion) [7]. This program will form a dual-track collaborative structure with the existing National Integrated Circuit Industry Investment Fund (“Big Fund”).

1. Localization of Semiconductor Equipment
   : 12-inch CMP equipment, wafer-level hybrid bonding equipment
2. Key Materials
   : High-end photoresist (KrF/ArF grade), high-purity quartz materials
3. EDA Tools
   : Break the monopoly of the three overseas giants
4. AI Chips and Advanced Computing
   : 3D integration, Chiplet packaging, HBM memory chips

External analysis believes that the implementation of this program will have multi-level impacts [7]:

• Short-term
  : Alleviate insufficient R&D investment of local enterprises and accelerate the technology verification process
• Mid-term
  : Promote collaborative breakthroughs in the entire industrial chain of “equipment-materials-manufacturing-packaging-design”
• Long-term
  : Convey to the world China’s firm determination to promote semiconductor autonomy and enhance its voice in the global semiconductor industrial division of labor

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Nvidia’s stock price reacted relatively mildly to the policy changes. After the close on January 13, Nvidia’s stock price was reported at $185.85 per share, with an increase of 0.47% [3]. Market insiders believe that the volume of H200 involved has limited impact on Nvidia’s production capacity allocation at TSMC, and it is more of a symbolic signal of the trade war [12].

Analyzed from five dimensions (durability, substitutability, precision, feedback, sustainability), the US’s semiconductor “bottlenecks” are more in-depth and long-lasting than China’s rare earth controls [13]. The institutional and financial depth of the US in the tech field (large tech companies, venture capital pools, private equity ecosystems) enables it to maintain its advantages continuously, while China faces different types of sustainability constraints [13].

1. Short-term (2026)
   : Exports of H200 to China will still be restricted, and China will accelerate domestic substitution; Huawei’s Ascend 910C is expected to enter mass production, with performance targeting the H200 [8]
2. Mid-term (2027-2028)
   : Chinese AI chips may form competitive advantages in the inference track; the regional characteristics of the global semiconductor supply chain will be further strengthened
3. Long-term (2028-2030)
   : If China breaks through the bottlenecks of advanced processes and equipment, it may reshape the global AI chip market pattern; otherwise, it will continue to maintain the hierarchical pattern of “Nvidia for training, domestic chips for inference”

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China’s new restrictions on Nvidia AI chip procurement are the latest evolution of the Sino-US tech rivalry, with far-reaching impacts:

• Accelerate the regionalization and localization of the semiconductor industrial chain
• Push up global chip manufacturing costs and compliance costs
• Promote the regional layout of key technologies such as HBM

• Nvidia’s market share in China will continue to shrink
• Chinese local AI chip enterprises gain a historic development window
• Inference chips become a new competitive track
• The global market pattern evolves from “dominance by one player” to “diversified competition”

• External pressure is transformed into internal innovation momentum
• Policy support provides financial guarantees for local enterprises
• Ecosystem construction (software stack, developer community) remains a key challenge

Under the current pattern, China is adopting a parallel strategy of “crossing the river by borrowing a boat” (limited use of Nvidia chips) and “crossing the river by building a boat” (accelerating domestic substitution) to promote the process of technological autonomy while maintaining computing power security. The final outcome of this rivalry will depend on the continuous competition between the two parties in technological innovation, industrial chain improvement, and sustainable development.

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[1] UCA North Chinese Weekly - “White House Officials Say China Rejects US H200 Chips to Support Local Industries” (https://ucausa.org/category/uca-weekly-magazine/)

[2] US Officially Approves Export of Nvidia H200 Chips to China - EDN Electronic Technology Design (https://www.eet-china.com/mp/a467245.html)

[3] US Officially Approves Export of Nvidia H200 Chips to China - EDN Electronic Technology Design (https://www.eet-china.com/mp/a467245.html)

[4] US Just Authorizes Conditional Export of Nvidia Chips to China; Chinese Customs Reportedly Restricts Entry of Nvidia H200 - RFI (https://www.rfi.fr/cn/中国/20260114-美国授权有条件向中国出口英伟达芯片-中国海关据报限制英伟达h200入境)

[5] China Restricts Nvidia H200 AI Chip Purchases - eWeek (https://www.eweek.com/news/china-limits-nvidia-chip-purchases/)

[6] In-Depth Analysis of U.S. Semiconductor Restrictions on China - Oreate AI (https://www.oreateai.com/blog/indepth-analysis-of-us-semiconductor-restrictions-on-china-industry-impact-and-strategic-responses/ac7736eb2def4939bdbae3b3390e3f56)

[7] China Plans to Launch 500 Billion Yuan New Policy to Boost Equipment, EDA and AI Chips - ESM China (https://www.esmchina.com/news/13751.html)

[8] US Approves Export of Nvidia H200 Chips to China: Restrictions Ease Slightly, Breakthrough Battle Enters New Stage - NetEase (https://www.163.com/dy/article/KJ7LCHFS05533SRC.html)

[9] China-U.S. Trade: Lessons for 2026 - China US Focus (https://www.chinausfocus.com/finance-economy/china-us-trade-lessons-for-2026)

[10] Domestic AI Chips: A Surge - 36Kr (https://m.36kr.com/p/3601821550937088)

[11] 2025 AI Chip Year-End Review: General-Purpose GPU vs. Inference Chip - Sina Finance (https://finance.sina.com.cn/roll/2026-01-06/doc-inhfknap5577378.shtml)

[12] Yea or nay: Will Nvidia H200 chips go to China? - Network World (https://www.networkworld.com/article/4117031/yea-or-nay-will-nvidia-h200-china.html)

[13] The Burn and the Choke: Why Semiconductor Controls Will Outlast China’s Rare Earth Weapon - War on the Rocks (https://warontherocks.com/2026/01/the-burn-and-the-choke-why-semiconductor-controls-will-outlast-chinas-rare-earth-weapon/)

[14] 2025 Year in Review | Sino-US Trade War Sways Like a Rollercoaster, Semiconductors vs. Rare Earths Become Final筹码对决 - HK01 Global (https://global.hk01.com/世界中国专题/60305849/2025大事回顾-中美贸易战如过山车走跌-半导体vs稀土结并分推推分推推分分推分分推分)

[15] Postponing Semiconductor Tariffs, Allowing High-End Chip Exports: US Shifts Tech Competition Strategy Against China - The Paper (https://news.qq.com/rain/a/20251226A0864S00)