huawei closes gap with nvidia in ai chips amid trade tensions

2025-02-26 general

Beijing, Wednesday, 26 February 2025.
huawei has made substantial progress in ai chip manufacturing. The yield rate of its ascend 910c processor increased to 40%. This is double the yield from a year ago. The company expects to reach 60% soon. This breakthrough allows huawei to compete more effectively with nvidia in the chinese market. The company plans to produce 100,000 ascend 910c chips and 300,000 910b chips this year. This signifies a major step towards chinese self-sufficiency in semiconductor technology.

boosting domestic ai infrastructure

This yield increase marks a significant milestone, enabling huawei’s ascend chip production line to achieve profitability for the first time [1][2]. The chinese government is also encouraging domestic firms to adopt huawei’s ai chips, aiming to reduce reliance on nvidia [2]. This push towards self-sufficiency aligns with china’s strategic priorities in key technological sectors [4]. Huawei’s progress is crucial for building a robust domestic ai infrastructure, mitigating risks associated with reliance on foreign technology [2].

Despite these advancements, nvidia remains a dominant player in the chinese ai chip market. Nvidia’s h20 chip sales in china reached 1 million units last year, generating $12 billion in revenue [2]. Huawei currently holds over 75% of china’s ai chip production [1][2]. Smaller competitors face challenges in securing sufficient production capacity from smic [1]. Huawei’s ability to increase production and improve chip performance will be critical in gaining further market share from nvidia [2].

technical challenges and future prospects

Huawei faces hurdles in persuading customers to switch from nvidia’s cuda software to its ascend series [1]. The ascend 910b chip has limitations in inter-chip connections and memory, hindering its use in large-scale model training [1]. Huawei is actively addressing these issues by enhancing software and increasing the memory capacity of the 910c series [1]. Austin lyons, a semiconductor analyst at creative strategies, notes that huawei’s 40% yield rate is commercially viable, comparing it to tsmc’s 60% yield for nvidia’s h100 ai processors [2].

implications for investors

Investors should monitor huawei’s progress in increasing its ai chip yield and market share. The company plans to produce 100,000 ascend 910c chips and 300,000 ascend 910b chips this year [1]. This is a significant increase from the 200,000 910b chips produced in 2024, with no mass production of the 910c at that time [2]. Successful execution of these production goals, combined with continued improvements in chip performance and software support, could positively impact investor confidence and huawei’s market valuation [1].

Bronnen

Huawei AI Chip Yield