Huawei is set to begin mass production of its latest AI chip, the Ascend 910C, in the first quarter of 2025, a move that signals both technological ambition and resilience amid ongoing US trade restrictions.
A Strategic Push Amid Geopolitical Tensions
Huawei’s decision to ramp up production of the Ascend 910C comes as the company navigates a challenging landscape shaped by US export controls and global competition. The chip is designed to rival high-performance processors from US-based Nvidia, aiming to strengthen China’s position in the global AI hardware race.
Despite significant obstacles—including limited access to advanced manufacturing technology due to US sanctions—Huawei has already sent samples of the Ascend 910C to major Chinese tech firms and begun taking orders. The chip is produced by Semiconductor Manufacturing International Corp (SMIC) using the N+2 process, but current yields are only about 20%, well below the 70% threshold typically needed for commercial viability. For comparison, previous Huawei chips like the 910B achieved yields of around 50%.
Technical and Production Challenges
The main hurdle for Huawei is the lack of access to extreme ultraviolet (EUV) lithography equipment from Dutch supplier ASML, which is essential for producing cutting-edge chips. As a workaround, SMIC and Huawei are relying on older deep ultraviolet (DUV) systems and advanced multi-patterning techniques, which are more resource-intensive and prone to lower yields6. This technological gap means that while Huawei is producing chips at the 7nm node, competitors like Nvidia and AMD are expected to move to 2nm by 2025, potentially impacting the market competitiveness of Huawei’s products.
Implications for the AI Hardware Market
Huawei’s push to mass-produce the Ascend 910C is significant for several reasons:
- Technological Sovereignty: The move is part of China’s broader effort to achieve self-sufficiency in advanced semiconductors, reducing reliance on foreign technology in a sector critical to national security and economic growth.
- Market Competition: By targeting domestic customers and leveraging government support, Huawei could maintain strong demand in China, even if its hardware lags behind global leaders in some technical aspects.
- Innovation Under Pressure: The company’s efforts to improve yields and explore alternative manufacturing techniques highlight the innovative strategies Chinese firms are adopting to circumvent international restrictions.
Looking Ahead
While the Ascend 910C’s initial production volumes may be constrained by yield issues, Huawei’s determination to scale up and its focus on the domestic market could help it carve out a significant share of China’s growing AI hardware sector. The ongoing US-China tech rivalry will likely continue to shape the pace and direction of these advancements, but Huawei’s progress underscores the rapid evolution and strategic importance of AI chip development in the global technology landscape