Nvidia 's H20 chips are likely to return to China, but tech experts don't expect them to be met with the same fanfare in the market in light of new competition and regulatory scrutiny.
The Trump administration last month gave Nvidia assurances that it would be permitted to resume sales of its H20 chips to China, after their exports had been effectively banned in April. It also announced a new "fully compliant" made-for-China chip.
The move was seen as a huge win for the company, which had flagged billions in losses due to the policy. But while the H20s might be returning to the Chinese market that doesn't mean Nvidia will regain its former market share, analysts caution.
In a recent report, global equity research and brokerage firm Bernstein forecast that Nvidia's AI chip market share in China would drop to 54% in 2025, from 66% the year prior.
This drop is only partly owed to complications with resuming chip supply, as Chinese AI chipmakers have been seizing more of the booming domestic market.
"U.S. export controls have created a unique opportunity for domestic AI processor vendors, as they are not competing with the most advanced global alternatives," Bernstein's report said, noting growing prominence of Chinese players such as Huawei, Cambricon and Hygon. "The localization ratio of China's AI chip market will surge from 17% in 2023 to 55% by 2027."
Other analysts such as The Futurum Group CEO Daniel Newman were more bullish about Nvidia's bounce back in China. However, he also flagged potential market share erosion from Nvidia customers that might have found success with Chinese rivals while the H20 controls were in place.
It's also worth noting that Bernstein's predictions assume that broader U.S. chip restrictions will remain largely unchanged. That creates a dynamic where Chinese companies continue to develop and offer advanced chips, possibly eroding demand for outdated U.S. offerings.