Recent reports indicate that Huawei, the Chinese tech conglomerate, could potentially manufacture up to one million Ascend 910C AI chips. This claim originates from a study by the Center for Strategic and International Studies (CSIS), which cites industry sources stating that Semiconductor Manufacturing International Corporation (SMIC), China’s leading chip producer, has overcome critical production challenges in creating 7-nanometer semiconductors. This breakthrough is attributed to SMIC acquiring essential U.S. chip manufacturing tools.
SMIC’s Production Capacity and Future Plans
Although SMIC currently lags behind Taiwan’s TSMC in producing advanced chips, its collaboration with Huawei may lead to significant advancements in extreme ultraviolet (EUV) lithography techniques, facilitated by robust resources aimed at addressing existing production bottlenecks. The report projects that SMIC aims to enhance its 7-nanometer wafer production to reach 50,000 units per month by the end of 2025.
In line with production targets, SMIC’s recent acquisition of U.S. etching and deposition tools has opened avenues for improving yield rates, which are currently low at about 20%. According to CSIS, firms like SiEn and Pensun successfully negotiated the sale of this equipment by assuring U.S. manufacturers that it would be used for chips less advanced than 14 nm.
NVIDIA’s Strategic Adjustments and Impact on Chinese AI Development
The report further elaborates on the dynamics of the AI landscape, focusing on DeepSeek, a Chinese AI company that has depended on NVIDIA’s GPUs for development. Due to U.S. export restrictions, DeepSeek has been exploring alternatives, including Huawei’s CANN programming language, which has not met its expectations for performance. The report highlights that NVIDIA has modified its A100 chips to create the A800 line specifically for Chinese firms, ensuring compliance with U.S. regulations while maintaining a competitive edge.
Interestingly, demand for the A800 and H800 GPUs has surged, largely due to their similar performance profiles to the more restricted A100 and H100 models.
Current State of Huawei’s AI Chips
As U.S. sanctions aimed at curtailing Huawei’s access to advanced chip technology remain in effect, the company’s ability to leverage its existing stockpiles is significant. Prior to the sanctions, TSMC manufactured over two million Ascend 910B logic dies, which are now wholly owned by Huawei. Each Ascend 910C requires pairing two Ascend 910B chips, reinforcing the estimation that Huawei can produce approximately one million of the newer model. However, the manufacturing process has inherent challenges, with approximately 75% of the chips successfully passing advanced packaging tests.
Conclusion on Export Controls and Future Implications
Moving forward, the extensive measures imposed on SMIC and other Chinese firms to prevent access to cutting-edge semiconductor technology highlight the ongoing geopolitical tensions surrounding technology and trade. The critical nature of these developments suggests that any lapses in export control implementations are diminishing, emphasizing the urgency for compliance and strategic adaptability within the industry.