China's AI Chipmakers Increase Prices Amid High-Bandwidth Memory Shortage

Chinese AI chipmakers are raising prices for their current and next-generation processors as a global shortage of high-bandwidth memory (HBM) pushes up costs across the industry. Huawei Technologies and Cambricon are among the companies that have reportedly increased prices, highlighting the growing challenges facing China's efforts to build domestic alternatives to Nvidia's advanced AI chips.

Huawei has raised the indicative price of its upcoming Ascend 950DT accelerator card to more than 250,000 yuan ($37,255), according to people familiar with the matter. The new price is around 20% to 50% higher than figures discussed with customers roughly two months ago, with the final amount depending on contract terms. Huawei has said the Ascend 950DT, its most advanced AI chip, is expected to become available in the fourth quarter of 2026.

Cambricon has also reportedly increased the expected price of its next-generation processor, tentatively known as the 690, by about 20% to 30% compared with prices indicated two months earlier. Smaller Chinese chipmakers MetaX and Iluvatar CoreX have also made similar price adjustments, according to industry sources.

The increases are being driven in part by the rising cost and limited availability of high-bandwidth memory, a crucial component used in AI computing. HBM consists of vertically stacked memory chips that allow AI processors to access large volumes of data at extremely high speeds. The advanced HBM market is dominated by SK Hynix, Samsung Electronics and US-based Micron Technology.

China's access to advanced HBM supplies has become more difficult since Washington tightened export restrictions on certain advanced memory products in December 2024. Chinese chip companies have increasingly relied on alternative and grey-market supply channels, where HBM can reportedly cost several times more than it does for buyers outside China. The higher memory costs are particularly significant because HBM accounts for a substantial share of the overall production cost of an AI accelerator. As a result, increases in memory prices are being passed on to customers through more expensive finished AI accelerator cards.

Huawei has previously said that its Ascend 950 series will use two proprietary HBM technologies. The Ascend 950PR is expected to use HiBL 1.0, while the 950DT will feature HiZQ 2.0. Huawei has not disclosed detailed information about where or how the memory for these systems is manufactured. The two chips are designed for different AI workloads. The Ascend 950DT is primarily intended for training AI models and generating responses, while the 950PR is designed to process user requests before they are sent to an AI model.

Prices of Huawei's older AI chips have also increased. The Ascend 950PR, which reportedly sold for around 60,000 yuan per card at the beginning of the year, is now priced above 80,000 yuan. The older Ascend 910C board has also risen to more than 110,000 yuan from approximately 90,000 yuan earlier in the year. The price increases come as Chinese technology companies face growing demand for AI computing capacity. Domestic chipmakers have benefited from restrictions on Nvidia's most advanced processors, which have encouraged Chinese companies to seek locally developed alternatives.

The supply crunch is also forcing chip companies to reconsider how they allocate their products. Iluvatar CoreX has reportedly doubled its GPU shipments to ByteDance, the technology group behind TikTok, to about 100,000 units this year. The company has also redirected some GPUs that were originally intended for its own operations to meet ByteDance's requirements.

Huawei is reportedly ByteDance's largest domestic AI chip supplier, followed by Cambricon and Iluvatar CoreX. Cambricon has not yet officially launched its 690 processor and currently lists the 590 as its flagship chip. The latest developments underline a major challenge for China's growing AI semiconductor industry. While domestic companies are rapidly developing processors designed to compete with foreign technology, shortages of advanced memory and other critical components are making production more expensive. If HBM supply remains tight, Chinese AI chip prices could face further upward pressure as companies expand their domestic computing infrastructure.

Disclaimer: This image is taken from Reuters.