Huawei Technologies is close to starting production of a new AI accelerator that will allow it to compete with Nvidia in the Chinese market. According to the source, for several weeks now local Internet companies and telecom operators have been testing the latest Huawei Ascend 910C accelerator, which, according to the manufacturer, is comparable in terms of performance to the Nvidia H100 chip, which is not available in the Middle Kingdom due to US sanctions.
Image source: Huawei Technologies
Huawei’s ability to continue to move forward in chip development is a sign that the company is managing to cope with the pressure that numerous sanctions are putting on the manufacturer. The vendor continues to create Chinese alternatives to various semiconductor products manufactured by the United States and its allies. Billions of dollars in government support have helped Huawei achieve a leading position in areas such as artificial intelligence, and also become a key tool in the hands of Beijing as it implements its plan to “import substitution” of American technology.
A knowledgeable source noted that Huawei is still facing delays in the production of current-generation semiconductor products. It is also possible that the United States will continue to impose restrictive measures against the Chinese manufacturer, depriving it of access to components necessary for production and the latest memory chips, which are used in hardware solutions for the field of artificial intelligence.
The source added that major Chinese companies such as ByteDance, Baidu and state-owned telecom operator China Mobile are in talks with Huawei to secure contracts for the supply of Ascend 910C accelerators. The first results of negotiations between Huawei and potential clients showed that the volume of orders will exceed 70 thousand chips, and their total value will be about $2 billion.
In 2019, the US government recognized Huawei as a threat to national security and included it in the so-called “black list,” which put strong pressure on the business of the Chinese vendor. In addition to numerous export restrictions, Huawei cannot use the production facilities of contractors, for example, in Taiwan to produce its own chips. US sanctions are also making it difficult to access critical components needed to create advanced chips and the equipment to make them.
Against this backdrop, China is increasing its support for the semiconductor industry. Thus, in May of this year, the national investment fund attracted $48 billion to support the industry. Huawei’s new AI accelerator should fill the void that has been left in the Chinese market since 2022, when US export restrictions effectively banned Nvidia from supplying advanced chips to China. Despite this, Nvidia continues to release less powerful accelerator options for the Chinese market that comply with export control regulations.
Nvidia’s Chinese customers have to make do with the less powerful H20 AI accelerators. At the same time, Nvidia’s American customers, such as OpenAI, Amazon and Google, will soon have access to the latest chips based on the Blackwell architecture, as well as the GB200 AI super accelerators based on them. According to Nvidia, these accelerators are several times more productive than the current generation.
At the same time, Nvidia is working on another AI accelerator for the Chinese market, which will be called B20. However, the company could face difficulties if the US government continues to tighten sanctions against China. Analysts at SemiAnalysis consider the arrival of the Ascend 910C AI accelerator to be a great achievement, since it may be even better than Nvidia’s B20. If Huawei is able to establish mass production of new accelerators, and Nvidia still does not have the opportunity to supply advanced solutions to China, then the American company’s share in the Chinese market will quickly decline. SemiAnalysis estimates that Huawei will be able to produce 1.3 to 1.4 million 910C accelerators per year if it does not face additional restrictions from the United States.
The report notes that in recent weeks, Huawei has begun replenishing stocks of advanced high-bandwidth memory chips due to concerns about new restrictions from the United States. The U.S. Commerce Department regularly updates sanctions and export controls, and industry sources expect new restrictions to be introduced before the end of the year.
At an industry conference in June, a Huawei executive said that nearly half of the large language models (LLMs) built in China were trained on Huawei accelerators. He also added that the 910B accelerators outperform Nvidia’s A100 in LLM training.
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