Huawei's AI Chip Ambitions Stalled by US Sanctions, Mass Production Planned for 2025

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Huawei faces significant challenges in advancing its AI chip technology due to US sanctions, forcing it to rely on older 7nm architecture. Despite obstacles, the company aims to mass-produce its newest AI chip by early 2025.

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Huawei's AI Chip Ambitions Hindered by US Sanctions

Huawei Technologies Co., a leading Chinese tech giant, is facing significant challenges in its quest to develop advanced AI chips due to US-led sanctions. The company's efforts to compete with industry leaders like Nvidia have been severely impacted, forcing it to rely on older technology for the foreseeable future 12.

Technological Constraints and Production Challenges

Huawei is currently designing its next two Ascend processors, intended to rival Nvidia's AI accelerators, using 7-nanometer architecture. This technology has been mainstream for years and is significantly behind the cutting edge. The limitation is a direct result of US restrictions preventing Huawei's chipmaking partners from acquiring state-of-the-art extreme ultraviolet (EUV) lithography systems from ASML Holding NV 13.

The company's main production partner, Semiconductor Manufacturing International Corp (SMIC), is struggling to produce even 7nm chips at consistent volumes. SMIC's production lines have been plagued by poor yield and reliability issues, with the Ascend 910C chip reportedly achieving only about 20% yield 24.

Plans for Mass Production Amid Constraints

Despite these setbacks, Huawei aims to begin mass production of its most advanced AI chip, the Ascend 910C, in the first quarter of 2025. The company has already started sending samples and taking orders for the new chip 25.

Implications for China's AI Ambitions

Huawei's struggles have broader implications for China's AI aspirations. The technological gap between China and the US is expected to widen, with Taiwan Semiconductor Manufacturing Co (TSMC) planning to produce 2nm chips by 2025, approximately three generations ahead of Huawei's capabilities 13.

US Sanctions and Their Impact

The US has imposed a series of restrictions on Huawei and other Chinese companies, citing national security concerns. These sanctions have effectively frozen Chinese technological advancements at current levels, depriving national champions like Huawei of the opportunity to progress to the next level of chip technology 14.

Huawei's Response and Future Outlook

In response to these challenges, Huawei and its partners are exploring novel methods to advance their technology. This includes attempting to push the limits of older deep ultraviolet (DUV) lithography machines using techniques like quadruple patterning. However, these methods are resource-intensive and prone to alignment errors and yield losses 34.

As Huawei continues to navigate these obstacles, the company plans to prioritize strategic government and corporate orders for its new chips. The ongoing situation underscores the complex interplay between technological advancement, international trade policies, and geopolitical tensions in the global semiconductor industry 25.

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