China’s push to build a domestic artificial intelligence chip industry is facing an unexpected obstacle: a global shortage of high-bandwidth memory, or HBM. Chinese chipmakers including Huawei and Cambricon have sharply increased prices for AI processors as the cost and availability of the critical memory technology come under pressure.
Huawei has raised the indicated price of its upcoming Ascend 950DT accelerator card to more than 250,000 yuan, or about $37,255. That represents an increase of between 20% and 50% from quotations given to customers only two months earlier. Cambricon has reportedly increased the indicative price of its next-generation 690 processor by 20% to 30%, while smaller Chinese competitors MetaX and Iluvatar CoreX have also raised prices.
The problem is particularly significant because HBM is not an optional component for modern AI computing. Its ability to move huge volumes of data rapidly is essential for advanced AI accelerators. The market for advanced HBM is dominated by South Korea’s SK Hynix and Samsung Electronics and US-based Micron, leaving Chinese chipmakers with limited options.
US export restrictions have made the situation more difficult. Since Washington tightened controls on certain advanced HBM shipments to China in December 2024, Chinese companies have increasingly relied on grey-market supplies, which can cost several times more than memory purchased by buyers outside China. Those additional costs are now feeding directly into AI chip prices.
The development exposes a crucial weakness in China’s semiconductor strategy. Beijing may be able to encourage domestic companies to design processors capable of competing with Nvidia, but building a complete AI hardware ecosystem requires access to advanced memory, manufacturing capacity, software and supply chains.
Demand is also intensifying. Iluvatar CoreX has reportedly doubled GPU shipments to ByteDance to around 100,000 units this year, illustrating how Chinese technology companies are competing for limited domestic computing capacity.
The bigger question is whether China can achieve genuine semiconductor self-sufficiency while critical components remain constrained. For now, the HBM shortage suggests that replacing Nvidia is not simply a chip-design challenge—it is a supply-chain challenge as well.
