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Morgan Stanley forecasts that by 2030, about 76% of the GPUs used for artificial intelligence (AI) in China will be domestically supplied, up sharply from 33% in 2024. The outlook comes as the United States tightens export controls on advanced AI chips, prompting China to accelerate localization across its semiconductor industry.
China’s strategy is expanding beyond established technology groups such as Huawei and Alibaba, with newer chip developers—including Cambricon and Moore Threads—working to develop alternatives to NVIDIA products. Morgan Stanley links the shift to the need for supply resilience as access to advanced chips becomes more constrained.
According to the report, the size of China’s AI chip market could rise from $6 billion in 2024 to $51 billion by 2030, implying a compound annual growth rate (CAGR) of about 42%.
On manufacturing capacity, China produced around 8,000 wafers per month in 2023 for processes of 12 nm and below. The report projects this will increase to 20,000 wafers by 2027, about 42,000 by 2028, and 50,000 by 2030.
Yield is also expected to improve to around 50%, which Morgan Stanley says would help gradually meet domestic demand in key segments.
From an investment perspective, cloud computing capital expenditure in China could reach $130 billion by 2030. Of that total, about 51% is expected to be allocated to AI-GPU infrastructure.
The report also projects that the GPU market will grow at an average rate of 23% per year from 2024 to 2030, reaching about $67 billion.
While the report highlights progress, it notes that some critical technologies remain dependent on foreign supply. Examples include optical lithography equipment used for high-bandwidth memory (HBM) and deep ultraviolet (DUV) systems, although steps toward localization have been taken.
Morgan Stanley says policy support can provide early momentum, but competitive dynamics will shape mid- and long-term outcomes. It adds that Chinese AI-GPU companies will need to demonstrate economic viability and profitability to sustain growth after 2028.
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