Huawei Boosts AI Chip Production Despite Taiwan Semi And ASML Ban, Aims to Challenge Nvidia In China

Huawei Technologies Co has significantly improved the amount of advanced artificial intelligence chips it can produce. The Chinese information and communications technology (ICT) infrastructure and smart devices provider has increased the “yield” or the percentage of functional chips made on the production line of its latest AI chips to ~40%, doubling from 20% about a year ago, the Financial Times reported, citing unnamed sources familiar with the matter.

The improved yield means that Huawei’s production line for Ascend chips has become profitable for the first time, the FT cited unnamed sources familiar with the matter.

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The company aims to improve yields to 60%, the industry standard for similar chips. Huawei currently accounts for more than three-quarters of the overall output of AI chips in China, the FT cited unnamed sources familiar with the matter.

Beijing urged local tech companies to buy more of Huawei’s AI chips and shift away from the U.S. chipmaker Nvidia Corp NVDA, which remains the market leader in China by far.

Nvidia dominates the AI chip market as Huawei struggles to match CUDA’s efficiency despite efforts to compete with its Ascend series.

Washington forced contract chip manufacturer Taiwan Semiconductor Manufacturing Co TSM to stop making Ascend and advanced smartphone chips in 2020 after the country blocked Huawei from accessing U.S. technology manufacturing.

Austin Lyons of Creative Strategies compared Huawei’s production to Taiwan Semiconductor’s estimated 60% yield for producing Nvidia’s H100 AI processor.

Huawei tapped the sanctioned Chinese fabrication group Semiconductor Manufacturing International Corp to relaunch its Ascend chip. The U.S. sanctions prohibited China from procuring advanced chipmaking equipment from the Dutch group ASML Holding ASML.

Huawei plans to produce 100,000 910C processors and 300,000 910B chips this year, the FT cited unnamed sources familiar with the matter.

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