China’s AI chipmakers raise prices as HBM shortage bites

China's AI chip manufacturers, such as Huawei and Cambricon, have significantly raised prices for their latest AI processors due to a shortage of high-bandwidth memory (HBM), a crucial component for AI computing. The price hikes, ranging from 20% to 50%, are primarily driven by the limited supply and increased costs of HBM, which is predominantly produced by South Korean, US, and Chinese firms.

HBM enables processors to access large amounts of data at high speeds, making it essential for AI applications like model development and response generation.

Huawei's Ascend 950DT, its most advanced AI chip, has seen its price jump to above ¥250,000, a 20% to 50% increase from earlier prices. The company has indicated that the 950DT will be available in the fourth quarter of 2026. Cambricon has also increased the price of its next-generation chip, the 690, by 20% to 30% from its previous indications. Other domestic chipmakers, including MetaX and Iluvatar CoreX, have implemented similar price increases.

The shortage of HBM, primarily sourced from South Korea, the United States, and China through grey-market channels, has forced Chinese AI chipmakers to adapt. Smaller rivals have adjusted their production lines to meet the demands of ByteDance, a major customer, and Cambricon has delayed the launch of its flagship 690 chip, previously expected to debut in the fourth quarter of 2026.

Older Huawei products, like the Ascend 950PR and Ascend 910C, have also seen price increases, further impacting the cost of building AI computing capacity. This pricing pressure underscores the challenges Chinese chipmakers face as they strive to replace Nvidia's processors with domestically produced alternatives amid US export controls.