伯恩斯坦-中国AI芯片大报告

A key controversy for the China AI chip sector is how U.S. export controls will affect thedynamics of AI chip supply and demand, especially given the recent change in Nvidia H20export controls withpotential sales resumption. In this call, our objective is to quantify thesupply and demand dynamics of AI chips in China and evaluate their broader implications.Overall, we believe demand for AI chips in China remains strong, while both global anddomestic vendors are likely to face supply constraints throughout 2025. That said, therecent resumption of Nvidia’s chip sales to China could provide a positive boost for localCSP, helping to partially alleviate the current supply shortage.Demand for AI chips is strong, supply is likely still constrained in CY25 even afterthe H20 sales resumption (Exhibit 2).Prior to the initial ban on H20 chips in China, weprojected that China’s AI chip demand in CY25 would reach $39.5 bn, with 37% fromdomestic vendors. We estimated the ban would reduce H20 sales in CY25 by ~$16.8 bn.However, given that Nvidia would have only about 4 months to resume production and sales(accounting for necessary lead times), we assume roughly $10.5 bn of this lost volumecould be recaptured in CY25. Additionally, the new B30 chip is expected to contribute anextra $2.8 bn, with shipments set to begin in September. We also anticipate AMD couldsecure around $1 bn in sales, while domestic vendors are likely to retain the $1.5 bn inincremental sales generated by the H20 ban. Combined, these factors would bring totalAI chip supply in China to an estimated $37 bn in CY25—still resulting in a $2.5 bn supplyshortage, though significantly smaller than the initial $12.6 bn gap we projected (Exhibit 1).If Nvidia can further accelerate production resumption, there could be an additional $3 bnupside to its China sales in CY25.The H20 sales resumption would benefit local CSPs and broader internet players.Our channel checks reveal that Bytedance, Alibaba, Tencent, Baidu rank as the toppurchasers of H20 chips in China (Exhibit 4), accounting for 80%+ of its total demand in2024. We expect them to continue to be large buyers once H20 resumes and expect otherCSPs and internet companies (e.g., Kuaishou) will also gain access and reduce constraintissues around their AI initiatives. Additionally, our checks indicate that despite the B30 chip(before H20 sales resumption) featuring lower specs, ~50% lower ASP lead to similar ROIvs H20, as a result large internet companies maintain strong interest in it with potentialorders nearing 1 million units. However, constrained supply chain lead times are likely toresult in some short-term supply shortages in CY25 that needed to be mitigated throughleasing arrangements with either domestic and global data centers.Domestic AI chip vendors are still expected to take share from NVDA/AMD,reaching ~55% self-sufficiency by 2027 (Exhibit 6).U.S. export controls have createda unique opportunity for domestic AI chip vendors, as they are not competing with themost advanced global alternatives. We project that the localization ratio of China’s AI chipmarket will surge from 17% in 2023 to 55% by 2027, driven by ongoing advancements inlocal chip performance and rapid expansion of domestic 7nm production capacity post-DeepSeek. With that, by 2027, the industry could transition from being supply-constrainedto demand-constrained, a change that may exert downward pressure on ASP. Notably,in 2025, we believe the primary supply bottlenecks are probably both foundry capacity &CoWoS production capabilities.www.bernsteinresearch.com BERNSTEIN TICKER TABLETickerRating688256.CH (Cambricon)M688041.CH (Hygon)O688981.CH (SMIC-A)O981.HK (SMIC-H)ONVDAOAMDMASIAXSPXO - Outperform, M - Market-Perform, U - Underperform, NR - Not Rated, CS - Coverage SuspendedNVDA, AMD estimate is Adjusted EPS; NVDA, AMD valuation is Adjusted P/E (x); 688981.CH, 981.HK base year is 2023; NVDA base year is 2025;Source: Bloomberg, Bernstein estimates and analysis.INVESTMENT IMPLICATIONSHygon (688041 CH): We rate Hygon Outperform with PT CNY 200.Cambricon (688256 CH): We rate Cambricon Market-Perform with PT CNY 600.SMIC (981 HK/688981 CH): We rate SMICOutperformwith TP=HKD 30.00 for H-share, and TP=CNY 110.00 for A-share.NVDA (Outperform, $185):The datacenter opportunity is enormous, and still early, with material upside still possible.AMD (Market-Perform, $95):AI expectations remain high, portions of the core business remain weak, and shares remainsomewhat expensive.CHINA SEMICONDUCTORS DETAILSIMPACT OF H20 RESTRICTION & SALES RESUMPTION ON CHINA AI CHIP MARKETOn April 9threquirements for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered orwith an ultimate parent therein, of the H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth,interconnect bandwidth, or combination thereof. This led to a significant loss in sales for Nvidia; CEO Jensen Huang (at theComputex