Huawei’s AI Chip Capability Under Scrutiny
According to a new report by the Center for Strategic and International Studies (CSIS), Chinese tech giant Huawei may have enough chips to produce as many as one million Ascend 910C AI chips. This assessment comes despite ongoing US sanctions aimed at restricting Huawei’s access to advanced semiconductor technology.
The report, citing industry sources, sheds light on China’s progress in overcoming challenges in chip manufacturing. Specifically, the Semiconductor International Manufacturing Corporation (SMIC), China’s leading chip manufacturer, has reportedly made advancements in scaling its 7-nanometer semiconductor fabrication process. This progress has been achieved through the acquisition of US deposition and other manufacturing tools.
While SMIC cannot compete with Taiwan Semiconductor Manufacturing Company (TSMC) in the production of the most advanced chips, the CSIS report suggests that the partnership between SMIC and Huawei could lead to an EUV breakthrough, thanks to considerable resources devoted to overcoming the key bottlenecks in the process.
US Export Controls Impact and Chinese AI Development
The report further details the impact of US export controls on Chinese AI development, particularly focusing on restrictions on the types of NVIDIA GPUs available to Chinese customers. NVIDIA has responded by modifying its existing chip products to comply with these restrictions.
Industry sources confirmed to CSIS that NVIDIA implemented a process that involved manipulating A100 chips to reduce their interconnect speeds, thereby meeting export control performance thresholds and creating the A800 product lines.
These China-specific A800 GPUs, designed to comply with US export restrictions, closely resembled the A100 GPUs in terms of their processing capabilities. Although the H800 GPUs differed somewhat from the restricted H100 GPUs, demand for the A800 and H800 boomed, making the demand for the H100 and A100 GPUs from China immaterial due to their comparable performance.
Huawei’s Strategy and Chip Production
With restrictions impacting the latest NVIDIA GPUs, companies like DeepSeek have had to consider alternative options for their AI development. DeepSeek has evaluated Huawei’s CANN, a CUDA alternative. However, sources indicate that DeepSeek found the combination of Ascend chips and CANN-compatible software to be a non-viable alternative, requiring years of development before they could produce commercially competitive products.
US sanctions against TSMC have been aimed at limiting Huawei’s ability to develop and produce cutting-edge AI chips. Huawei’s Ascend 910B and Ascend 910C chips are at the center of these restrictions.
The CSIS report indicates that TSMC manufactured over 2 million Ascend 910B logic dies before the US sanctions. As one Ascend 910C unit combines two 910Bs, this leads the researchers to estimate that Huawei potentially has the capacity to produce one million Ascend 910C chips. The advanced packaging process, however, introduces defects, and current estimates suggest only about 75% of the Ascend 910Cs survive this process.
A systems engineer operates DUV lithography machine. Image: ASML
SMIC’s 7nm Production Expansion
Despite sanctions preventing SMIC from acquiring EUV equipment, it has utilized older DUV equipment to produce 7-nanometer chips. The company plans to significantly expand its 7nm production capacity by acquiring additional US etching, deposition, and other tools used in chip manufacturing. These tools are also expected to improve SMIC’s 7nm yield rates.
Industry sources stated that three Chinese firms, SiEn, Pensun, and Huawei’s fab in Dongguan, legally acquired the necessary equipment for two reasons: (1) the equipment wasn’t restricted country-wide and (2) it was restricted based on end use and end-user, with the Chinese firms assuring US companies that the machines would only be used to manufacture less advanced products (below 14nm).
Sources believe that SMIC has the goal of producing 50,000 wafers per month by the end of 2025. With a 20% yield, that could translate to 400,000 910C chips per month.
The report concludes that the window for less stringent export control enforcement has closed, and there is an urgent need for stronger measures.
