Huawei has boosted the yield rate of its latest Ascend series AI chips from 20% to nearly 40% over the past year, according to sources cited by the Financial Times. This marks the first time the production line has turned a profit for the Chinese tech giant. Huawei aims to increase the yield to 60%, aligning with the industry standard for similar chips, the sources noted.
Why it matters: Huawei’s improved yield rate for its Ascend AI chips marks a major step in China’s push for tech self-sufficiency. Amid US export controls, this development strengthens China’s efforts to reduce reliance on US chipmaker NVIDIA, particularly in the rapidly growing AI sector.
Details: Huawei teamed up with the state-owned chip foundry Semiconductor Manufacturing International Corp (SMIC), which is under US sanctions, to manufacture its Ascend chip.
- Austin Lyons, a semiconductor analyst at consultancy Creative Strategies, suggested that Huawei’s chip could be commercially viable at a 40% yield, similar to TSMC’s 60% yield for NVIDIA’s H100 AI processor, as reported by the Financial Times.
- Huawei’s Ascend AI chips are manufactured by SMIC using the N+2 process, which does not require extreme ultraviolet (EUV) lithography technology to produce advanced chips. Due to US-led export controls, mainland China is currently unable to purchase EUV equipment from Dutch chip-making equipment giant ASML.
- Huawei plans to produce 100,000 Ascend 910C processors and 300,000 Ascend 910B processors this year, the Financial Times reported, citing sources familiar with the matter. Last year, Huawei produced 200,000 Ascend 910B processors; production of the Ascend 910C has yet to begin.
Context: Currently, NVIDIA still leads Huawei in AI chip sales in mainland China, the Financial Times report suggested. The consultancy SemiAnalysis estimated that NVIDIA earned $12 billion from selling one million of its H20 chips to China last year.
- NVIDIA can only sell its H20 AI chips in China due to US export controls that restrict the sale of advanced chips with high-performance capabilities, such as the H100. Designed specifically for the Chinese market, the H20 AI chip is a modified version of the H100, which offers less than 15% of the AI computing power of the H100.
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