China's AI Chips and Export Controls: Ascend, SMIC — 2026-10-29
China has proposed sweeping new export controls on its own AI technologies, targeting 40 specific categories including advanced chips and models to retain domestic strategic advantages. Meanwhile, domestic chipmakers Cambricon and Hygon reported strong Q3 financial results, reflecting a market shift where Huawei’s Ascend series captures nearly 28% of China’s AI accelerator shipments, displacing Nvidia’s dominance.
China's AI Chips and Export Controls: Ascend, SMIC — 2026-10-29
Top developments
Beijing Proposes Export Curbs on AI "Crown Jewels"
On October 28, reports confirmed that China is proposing new export restrictions on approximately 40 AI-related technologies, including advanced chips, large language models, and AI agents. This move aims to keep critical technology within China, reversing previous openness to foreign investment in these sectors. The draft regulations include 14 total bans and 26 items requiring specific licenses, with a focus on models exceeding 2 trillion parameters.
Cambricon and Hygon Post Strong Q3 Results
Chinese AI chip manufacturers reported robust financial performance for the third quarter of 2026. Cambricon disclosed that its revenue for the first three quarters reached 9.526 billion yuan, driven by accelerated domestic substitution due to restrictions on Nvidia chips. Hygon Information also reported significant income and profit growth, with the two companies vying for top positions in different financial metrics. This surge highlights the "supply shortage" environment where domestic alternatives are filling the void left by US restrictions.
Huawei Ascend Market Share Nears 28%
Data cited by local media indicates that Huawei’s Ascend series has captured approximately 28% of the Chinese data center AI accelerator market in the first half of 2026, with shipments nearly doubling. Nvidia’s share has fallen to 34%, down from previous highs, as export controls limit H20 and H200 availability. Notably, non-GPU accelerators have surpassed GPU shipments for the first time, signaling a structural shift in China’s compute infrastructure toward Huawei and other domestic vendors.
US Treasury Considers Removing Compute Thresholds
A new analysis from Huxiu highlights that the US Treasury is considering a rule to abolish specific compute performance thresholds for chip exports. This potential change would shift the regulatory logic from technical specifications to broader national security concerns, potentially tightening controls on a wider range of chips currently below the threshold. This uncertainty adds pressure on Chinese firms to accelerate their own domestic supply chain independence.
Local view
Local financial media, particularly 21st Century Business Herald (21财经), are framing the Q3 earnings of Cambricon and Hygon as a "duel" between domestic leaders, emphasizing that revenue growth is directly tied to the "forced" substitution of Nvidia hardware. Analysts note that while Cambricon’s inventory levels remain high (11.665 billion yuan), the strong top-line growth validates the market’s demand for domestic AI compute.
Sina Weibo discussions highlight a narrative of "system-level innovation" over pure nanometer process chasing, with Huawei’s Ascend, Cambricon, and Hygon forming a "one super, many strong" landscape. The consensus among local tech commentators is that 2026 is the "first year of domestic AI chip training implementation," with market share for domestic accelerators finally stabilizing above 40%.
Context & numbers
- Cambricon Revenue: 9.526 billion yuan for the first three quarters of 2026, showing massive year-over-year growth.
- Moore Threads Revenue: 1.736 billion yuan in H1 2026, a 147% year-over-year increase.
- Biren Technology Revenue: 1.236 billion yuan in H1 2026, representing nearly a 20-fold increase year-over-year.
- Nvidia Market Share: Dropped to 34% in the Chinese AI accelerator market in H1 2026, down from higher previous levels, while Huawei rose to 28%.
- Export Control Scope: China’s proposed draft covers 40 technologies, including 14 bans and 26 licensed items.
On the radar
- Taiwan Export Alignment: Reports indicate Taiwan is preparing to tighten its own export controls on AI chips to China, aligning more closely with US restrictions as part of a broader trade deal.
- Nvidia H200 Status: While US licenses have been granted for H200 chips, Chinese import approvals remain stalled, creating a bottleneck for firms like ByteDance and Tencent that have already received sample batches.
- Spy Plot Allegations: Recent reports allege a spy plot involving a Chinese intelligence asset targeting Nvidia executives, which may influence future US policy attitudes towards Nvidia’s engagement with China.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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