It appears that Huawei has found a way to circumvent US sanctions and produce a substantial number of advanced AI chips, according to a report by the Center for Strategic and International Studies (CSIS). Sources within China’s chip industry claim that Huawei has enough chips to produce around 750,000 units of its Ascend 910C AI chip. This is a significant development, given the US restrictions on exporting advanced chips to China.
The report suggests that SMIC, a major Chinese chip manufacturer, has managed to overcome production limitations using 7nm processes with tools acquired from the US. Although SMIC still lags behind Taiwan’s TSMC in terms of production capacity, its partnership with Huawei has enabled it to overcome these hurdles without relying on extreme ultraviolet (EUV) lithography machines. This is a notable achievement, as EUV machines are typically required for producing high-end chips.
The CSIS report also highlights that Chinese AI companies have been able to develop advanced AI models despite US restrictions on exporting new NVIDIA chips to China. This may be due to NVIDIA’s ability to modify its existing chips to meet US export requirements while still maintaining their computational power. For instance, NVIDIA has been able to disable certain features on its A100 chips to reduce their interconnect speed, allowing them to meet US export criteria while still being used for developing advanced AI models like DeepSeek.
In the case of Huawei, the US had previously blocked TSMC from shipping chips to the company, aiming to hinder the development of its AI chips, including the Ascend 910B and Ascend 910C. However, sources within the government told CSIS that before the export ban was imposed, TSMC had already developed over 2 million logic chip wafers for the Ascend 910B, all of which are now in Huawei’s possession.
Given that the Ascend 910C is essentially a combination of two Ascend 910B chips, researchers believe that Huawei could potentially produce up to 1 million Ascend 910C chips (i.e., 2 Ascend 910B chips = 1 Ascend 910C chip). However, accounting for potential errors during the packaging process, the actual production yield might be around 75%, resulting in approximately 750,000 units.
Regarding EUV lithography machines, while the US and the Netherlands have imposed export restrictions on these advanced machines to China, SMIC’s existing deep ultraviolet (DUV) machines and other tools have still allowed the company to produce chips using 7nm processes. This highlights the complexities of enforcing export controls on advanced technologies and the resourcefulness of companies like Huawei in finding ways to adapt and overcome these limitations.
