Huawei is reportedly facing production bottlenecks amid the success of both its Mate 60 Pro 5G device and Ascend AI chip, with the company reportedly struggling with US trade sanctions. This proves that the technology in question has been successfully developed domestically.
The company was added to the U.S. Entity List’s trade blacklist in 2019, preventing it from purchasing advanced 5G-enabled chips, which were apparently made domestically by China’s Semiconductor Manufacturing Corporation (SMIC) last year. Announced 5G compatible Mate 60 Pro using Kirin chip. .
Meanwhile, two rounds of U.S. sanctions in 2022 and 2023 have prevented Chinese companies from purchasing high-end AI accelerator chips from companies such as market leader Nvidia.
Huawei’s Ascend 910B AI chip is widely considered to be the best Nvidia alternative AI accelerator available in China.
low yield
With demand for both the Kirin-powered Mate 60 Pro and Ascend 910B surging, Huawei is prioritizing production of Ascend chips, leading to production delays for the smartphones, Reuters reported.
A government initiative announced last October to boost China’s computing power has stimulated demand for Ascend chips, the report said.
The news agency said both Ascend and Kirin chips are further challenged by low yields, or the low number of usable chips per wafer, further increasing production challenges.
Yield issues are a side effect of modifying deep ultraviolet (DUV) lithography equipment to make more advanced chips, rather than top-of-the-line extreme ultraviolet (EUV) systems, which are banned from sale to China. Probability is high.
Top sales spot in China
The Mate 60 Pro has been selling out since its release last fall, with buyers saying it takes up to a month to pre-order.
Nevertheless, according to Counterpoint, sales of this device were the main driving force behind Huawei’s return to the number one selling spot in China in the first two weeks of 2024, and the first time since the end of 2020 that became the top seller in terms of sales.
According to Reuters, Huawei’s Ascend-powered MDC 810 computing unit, which supports advanced driver assistance systems, has also been affected by bottlenecks, causing Chinese automakers to delay deliveries of flagship models.
Nina Xiang, managing director of TH Capital, said in a Friday op-ed for the Nikkei Shimbun that Huawei’s success in rebuilding its business in areas such as smartphones, AI chips, and even electric vehicles has led to U.S. officials It should be a “moment of reflection” for the United States and “we should recognize it,” he said. Further sanctions will only reduce profits. ”
“Moment of reflection”
“This success is a sign that Chinese companies are finding a way to competitively begin producing cutting-edge semiconductors at scale, even as the U.S. seeks to limit the development of the industry.” “It has a profound meaning that goes beyond the way,” she wrote.
“A more effective approach would include reemphasizing increased investment in research to maintain U.S. technological leadership and foster innovation,” she wrote. “This initiative is not only likely to be successful, but will also help win back the respect of other countries.”
