In China’s artificial intelligence (AI) server market, the share of local chip players led by Huawei and Cambricon is expected to approach 80 percent this year.

On June 25 local time, the South China Morning Post reported that Taiwan market research firm TrendForce forecast Chinese chip suppliers and custom chips designed by Chinese internet companies will take up most of the market in China this year.

The key point is that China’s supply chain is quickly filling the gap left by overseas companies. TrendForce expects foreign suppliers including Nvidia and AMD to see their share of China’s AI server market fall to 21 percent in 2026 from 34 percent last year. It sees the share of Chinese chip suppliers led by Huawei and Cambricon rising to 56 percent in 2026 from 46 percent in 2025.

Chinese internet companies are also increasing the share of custom semiconductors they design themselves. TrendForce forecast Chinese internet companies’ share of custom semiconductors in this market will expand to 23 percent from 20 percent a year earlier. TrendForce research manager Frank Kung (쿵) said at a company event in Shenzhen that the segment will keep growing, adding that geopolitical uncertainty and the Chinese government’s push for technological self-reliance are bringing forward wider adoption.

On the demand side, large Chinese internet companies are driving the spread of AI chips. They are rapidly increasing adoption of domestically made processors from suppliers such as Huawei and Cambricon. Kung said ByteDance and Alibaba Group Holding are among the most aggressive companies in building AI infrastructure.

Competition to develop in-house chips is also intensifying. Kung said these Chinese big tech firms are not only the biggest buyers of servers and AI infrastructure but are also expected to become the most promising players in developing chips for internal use. Alibaba and Baidu are strengthening development of their own custom semiconductors through their chip units T-Head and Kunlunxin, respectively.

This trend is not limited to China. Google and Amazon.com are also stepping up investment in customised AI chips, and the share such chips take in the global AI server market is expected to rise gradually. The structure of China’s market and the global market is moving differently.

Nvidia is losing ground in China, but it is still maintaining global leadership. TrendForce forecast global AI server shipments will rise by more than 28 percent in 2026, supported by aggressive capital spending by major technology companies worldwide. In the same year, Nvidia is expected to keep the top global market share at 64 percent, followed by AMD at 8.6 percent.

By contrast, Chinese AI accelerator suppliers led by Huawei and Cambricon could secure a 20 percent share of the global market next year. That implies demand built up in China could translate into an ability to expand overseas.

Uncertainty remains. Kung cited geopolitical tensions and tariff-related uncertainty as the biggest risk factors for the global market next year. The reshaping of China’s AI server chip market is expected for the time being to be influenced not only by technology competition but also by changes in supply chains and the trade environment.