“Darkest Hour” of U.S.-China Tech Decoupling? Nvidia’s China Market Share Falls to Zero, Micron Plans Exit

TradingKey - As U.S.-China trade tensions escalate once again over rare earths and ships, American tech chip giants are finding it increasingly difficult to operate in China. Recent reports indicate that Nvidia’s market share in China has dropped from 95% to zero, while memory chip giant Micron Technology is planning to exit its server chip business in China.

According to a video released on October 15 of an event earlier this month featuring Jensen Huang, CEO of Nvidia, he revealed that due to U.S. semiconductor export controls, Nvidia’s market share in China’s advanced chip market has fallen from 95% to zero.

While the decline in Nvidia’s market share in China was expected, the stark reality of such a collapse remains shocking. In May, Huang stated that Nvidia’s market share in China had dropped from 95% four years ago to 50%, criticizing U.S. AI chip export restrictions on China as a failed policy.

Since 2022, exports of Nvidia’s A100, H100, and H200 series chips to China have been strictly restricted by the U.S. government. Over recent months, as U.S.-China trade talks resumed, Nvidia sought opportunities to resume shipments to the Chinese market.

However, after Washington approved partial resumption of chip exports, control over Nvidia’s lifeline in China shifted into Chinese hands — recently, the Chinese government has intensified scrutiny of U.S. chip companies and strengthened efforts to develop domestically produced semiconductors.

Micron Technology faces a similar situation. The company, which was the first chipmaker targeted by China in retaliation during the tech war when its products were banned from critical infrastructure uses in 2023, is now planning a complete withdrawal from the server chip market in China.

According to Reuters, citing sources familiar with the matter, Micron generated $3.4 billion in revenue from mainland China in the last fiscal year, accounting for 12% of its total revenue. However, after halting supply of server chips to the Chinese market, Micron plans to continue selling products to Chinese companies with data center operations overseas, such as Lenovo.

Micron’s data center team in China employs around 300 people; the extent to which these positions will be affected by the strategic withdrawal remains unclear.

For both Nvidia and Micron, China represents a crucial revenue-generating market. Huang emphasized that excluding Nvidia from the Chinese market is detrimental to China — but even more so to the United States. 

Micron also stated that it maintains strong operations and customer influence in China, and that China remains a significant market for Micron and the broader semiconductor industry.

On Friday, ahead of the market open, Nvidia shares fell over 2%, while Micron stock dropped about 4%. Year-to-date, the two stocks have risen 35% and 141%, respectively.