huawei defies us sanctions with ai chip breakthrough

2025-02-26 general

Shenzhen, Wednesday, 26 February 2025.
amidst us sanctions, huawei has reportedly doubled the yield of its ascend ai chips to 40%, a move that could reshape the competitive landscape. this milestone marks the first time huawei’s ascend chip production line has become profitable. the company aims to boost yields to 60%, potentially challenging nvidia’s dominance. with plans to produce 100,000 ascend 910c processors and 300,000 ascend 910b chips in 2025, huawei is positioning itself as a key player in china’s push for ai independence.

implications for nvidia

Nvidia remains a dominant force in the Chinese market, despite us export controls [8]. The controls restrict Nvidia to selling the H20 chip in China, a less powerful version of its H100 [8]. SemiAnalysis estimates Nvidia sold 1 million H20 chips in China last year, generating $12 billion in revenue [8]. Huawei’s advancements could threaten Nvidia’s market share, particularly if Chinese firms prioritize domestic chips [8]. Investors should monitor Nvidia’s sales trends in China and its response to Huawei’s growing capabilities [alert! ‘Nvidia stock prices are sensitive to changes in the competitive landscape of the AI chip market.’]

huawei’s production ramp-up

Huawei’s increased yield is a critical step. It allows for expanded production of its Ascend series [1]. The company plans to produce 100,000 Ascend 910C processors and 300,000 Ascend 910B chips in 2025 [1]. This represents a significant increase from 2024 when Huawei produced 200,000 Ascend 910B chips and no 910C chips [1]. This production increase signals Huawei’s intent to capture a larger share of the ai chip market [1]. The 100 or 100% increase in total units produced shows a huge commitment [1].

technical challenges and advancements

Huawei’s Ascend 910C processor is reported to achieve 60% of the performance of Nvidia’s H100 [1]. However, the Ascend 910B has faced challenges in large-scale model training due to interconnect and memory management issues [8]. Huawei is actively working to improve these aspects in its 910C series [8]. Overcoming these technical hurdles will be crucial for Huawei to compete effectively with Nvidia [8]. Success here would further increase investor confidence [alert! ‘investors should monitor technical reviews and benchmarks of the Ascend 910C to assess its competitiveness.’]

smic partnership and geopolitical context

Huawei’s Ascend chips are manufactured by SMIC using its N+2 process [2]. This process allows Huawei to produce advanced chips without EUV lithography, which China is currently unable to acquire due to us sanctions [2]. This partnership is vital for China’s self-sufficiency in chip production [2]. It also highlights the ongoing tech war between the us and China [2]. Investors should consider the geopolitical risks and the potential for further restrictions [alert! ‘geopolitical factors can significantly impact the valuations of technology companies involved.’]

market implications and expert opinions

Austin Lyons, a semiconductor analyst at Creative Strategies, compares Huawei’s production milestone to TSMC’s 60% yield for Nvidia’s H100 ai processors [2]. Lyons suggests that even with a 40% yield, Huawei’s chips can be commercially viable [2]. This assessment indicates that Huawei’s progress is significant and could lead to increased market competition [2]. Investors should pay attention to expert analysis and market forecasts to gauge the long-term impact of Huawei’s advancements [alert! ‘market dynamics are subject to change, and expert opinions may vary.’]

Bronnen

AI chips Manufacturing yield