In the midst of the United States tightening export controls on High Bandwidth Memory (HBM) to China and continued global supply shortages, Chinese artificial intelligence (AI) chip manufacturers have begun significantly adjusting prices.
According to a report from Reuters on Thursday, September 10, Chinese AI chip manufacturers, including Huawei and Cambricon, have substantially raised the prices of existing and next-generation AI processors by at least 20%.
The report indicates that the shortage and price increase of HBM are driving up the manufacturing costs of Chinese domestically produced AI processors. This not only increases the difficulty for Chinese tech companies to substitute Nvidia products with domestic chips but may also raise the funding threshold for the expansion of data centers and AI computing infrastructure.
Two sources revealed that Huawei has raised the reference price of its integrated artificial intelligence processor, memory, and other components, the Ascend 950DT accelerator card, to over 250,000 yuan.
The sources stated that the price increase this time ranged from 20% to 50% based on pricing given to customers two months ago, with the specific increase depending on contract terms. Prices of existing versions of the accelerator cards have also been raised.
The sources said that Beijing-based chip design company Cambricon has also raised the guided prices for the next generation of processors. The company’s new generation chip, tentatively named Siyuan 690, has increased by 20% to 30% from the expected levels two months ago.
It was added by the sources that smaller-scale GPU and AI chip startups like MetaX and Iluvatar CoreX have also implemented similar magnitude price increases on their computing hardware recently.
As pricing discussions have not been made public, the sources declined to disclose their identities.
HBM is a crucial memory component required for high-level AI computing. HBM can provide AI processors with extremely high data throughput rates and is an indispensable hardware support for massive model training and high-speed inference calculations.
In December 2024, the US Department of Commerce’s Bureau of Industry and Security (BIS) announced enhanced semiconductor export controls, imposing controls for the first time on specific HBM products. BIS stated that HBM is crucial for large-scale AI training and inference and is an essential component of advanced computational integrated circuits. The new rules cover HBM produced in the US and certain foreign-made HBM subject to the US Export Administration Regulations under the Advanced Computing Foreign Direct Product Rule.
Reuters, quoting informed sources, stated that Chinese chip companies are increasingly relying on gray market channels to obtain advanced HBM supply, with prices for such HBM components often multiple times the normal purchase price for overseas buyers.
Given that HBM accounts for the vast majority of the production cost of AI accelerator cards, the premium on critical components directly raises the selling prices of final cards and servers. This means that even if Chinese companies can offer domestically produced AI chips, they may still be constrained by advanced memory, packaging, and supply chain elements, making it difficult to fully avoid cost pressures.