China's AI chipmakers raise prices as high-bandwidth memory shortage bites

Chinese AI chip manufacturers, such as Huawei Technologies and Cambricon, have recently implemented significant price increases for their latest AI processors, as soaring costs for high-bandwidth memory (HBM) hamper the development of homegrown alternatives to Nvidia's offerings. Huawei recently raised the price of its Ascend 950DT accelerator card, which combines an AI processor with memory and other components, to over 250,000 yuan ($37,255), a 20% to 50% increase from prices quoted to customers two months ago.

Beijing-based Cambricon has also raised the price of its next-generation chip, the 690, by 20% to 30% from levels it indicated two months ago. The price hikes reflect the broader impact of a worldwide HBM shortage on China's AI industry, as Beijing urges companies to replace Nvidia's products with domestically produced alternatives.

Since the U.S. tightened controls on exports of certain advanced HBM products to China in December 2024, Chinese chipmakers have increasingly relied on gray-market channels to secure supplies, which typically cost several times more than what buyers outside China pay. This situation is forcing chipmakers to reevaluate their production costs and allocation of resources, with some companies like Iluvatar CoreX doubling shipments of GPUs to meet the demands of major clients.