Chinese AI Chipmakers Hike Prices Amid High-Bandwidth Memory Shortage

Major Chinese artificial intelligence chipmakers are sharply increasing the prices of their processors, a move driven by a severe shortage and soaring costs of essential high-bandwidth memory (HBM), according to people familiar with the matter. The hikes underscore the challenges facing China's efforts to develop domestic alternatives to Nvidia's advanced chips amid U.S. export restrictions.

Price Increases Across the Board

Huawei Technologies has reportedly lifted the indicated price of its forthcoming Ascend 950DT accelerator card to over 250,000 yuan ($37,255), two sources said. This represents a significant increase of 20% to 50% from quotes provided to customers just two months ago, with the final price depending on contract terms. The 950DT is slated to be Huawei's most advanced AI chip, available in the fourth quarter of 2026.

Other domestic players are following suit. Cambricon has repriced its next-generation chip, tentatively called the 690, at 20% to 30% above its previous indications, according to two sources. Smaller firms like MetaX and Iluvatar CoreX have implemented similar price increases. Prices for Huawei's older-generation products have also climbed, with the Ascend 950PR now selling for over 80,000 yuan, up about 30% since the start of the year.

The HBM Bottleneck

The price surge is a direct consequence of a global supply crunch for HBM, a critical component that involves vertically stacking memory chips to allow processors to access data at extremely high speeds. The market for this advanced memory is dominated by South Korea's SK Hynix and Samsung Electronics, along with U.S.-based Micron Technology.

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Since Washington tightened controls on the export of certain advanced HBM products to China in December 2024, Chinese chipmakers have been forced to procure supplies through grey-market channels, the sources said. HBM acquired this way typically costs several times more than the standard market rate, directly inflating the production cost of the final AI accelerator cards.

Market Implications

These rising costs create a significant bottleneck for China's ambitions in artificial intelligence, increasing the capital required to build out domestic computing infrastructure. The situation complicates Beijing's push to replace restricted Nvidia processors with homegrown technology, a key strategic goal following U.S. sanctions.

The shortage is also forcing suppliers to reallocate their limited inventory. According to one source, Iluvatar CoreX has doubled its planned GPU shipments to tech giant ByteDance to 100,000 units this year to meet the client's urgent computing needs. Huawei, Cambricon, MetaX, Iluvatar CoreX, and ByteDance did not respond to requests for comment from Reuters, who first reported the pricing discussions.