According to KDC‘s China Domestic Server Market Research Report (2025), Triggered by US export controls on high-end GPU chips starting from late 2022 and backed by a full set of national fiscal and tax incentive policies, China’s domestic server industry is undergoing accelerated localized development.
The driving force of domestic server replacement is gradually transforming. While policy mandates once played a decisive role, improving product maturity together with surging AIGC and cloud-computing demand push more enterprises to select domestic servers out of comprehensive considerations of cost, service and supply-chain risk control, shifting from policy-driven toward market-driven growth logic.
Differentiated competition emerges across general-purpose server and AI-server tracks, and domestic products keep expanding into more vertical industries following the “2+8+N” substitution roadmap. Strategic integration among local suppliers is frequent, and Huawei-ecology participants occupy a dominant position in the fast-growing domestic AI-server segment amid ongoing chip supply uncertainties.
KEY TAKEAWAYS
Market growth fueled by policy support and external constraints. Annual growth rate of domestic server market has exceeded 20% since 2022. Market size reached RMB 69.3 billion in 2024 and is projected to hit RMB 94.53 billion in 2025. US export controls targeting A100, H100 and H20 GPUs create wider market windows for local vendors, while enterprises make more voluntary purchasing choices beyond policy requirements.
Segmented competitive landscape for domestic general-purpose and AI servers. Kunpeng-based and X86-based players compete in general-purpose server market. Ascend‑based vendors capture over 70% share of domestic AI server market. Super Fusion, Hwabon United and other Huawei-ecology players are major contributors; most non-Ascend vendors choose deep cooperation with Ascend for stable chip supply.
Continuous industry penetration following “2+8+N” substitution path. Replacement initiatives expand from government-affiliated sectors into finance, telecom and power industries. Key use-cases cover core transaction migration in finance, intelligent computing-center deployment in telecom and ERP-cloud platform upgrading in power sector. M&A and strategic integration among local suppliers help improve overall industrial competitiveness.
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