Huawei Can Produce Millions of AI Chips a Year Despite Sanctions, US Experts Find

A new study by the Washington-based CSIS center sheds light on China’s Huawei Technologies’ ability to produce large quantities of its Ascend 910 family of computing accelerators even under U.S. sanctions. By relying on SMIC’s technological capabilities and the services of proxy suppliers, Huawei can produce millions of these accelerators every year.

Image source: Huawei Technologies

The authors of the detailed report come to this conclusion gradually. First, they report that Huawei received more than 2 million Ascend 910B chips manufactured by Taiwan’s TSMC through shell companies, already under US sanctions. At the same time, TSMC did not realize who these products were intended for.

Since the Ascend 910C accelerator is formed by combining two Ascend 910B crystals in a common package, Huawei can manufacture no more than 1 million Ascend 910C accelerators from this quantity. Considering that the complex packaging technology allows for up to 25% defects, the actual number of finished accelerators will be less than a million pieces.

In terms of HBM availability for these accelerators, Huawei has been able to stockpile enough memory to last for more than a year. This was before the restrictions on HBM supplies to China came into effect last December. However, Huawei may use front companies or rely on Chinese suppliers in the future if they can get HBM production going.

In any case, in the context of the fight against “smuggling” of chips to China, Huawei will be forced to rely increasingly on Chinese partners to produce components for the Ascend 910C. SMIC remains the main candidate for the production of these chips, but its yield level of good products is still at about 20%. Some of the lower-quality chips can be used with degraded characteristics and performance, but about 60% of the crystals still end up in rejects.

After running calculations, CSIS concluded that SMIC could produce up to 400,000 Ascend 910C chips per month if it worked exclusively on Huawei orders. Some of them would be rejected at the packaging stage, but even taking into account the losses, the company would be able to get several million chips within a year.

Experts estimate the performance of Huawei Ascend 910C at approximately 60% of the level of Nvidia H100 – not the most powerful solution in the range of the American company, but banned from delivery to China. As the authors of the report note, DeepSeek, using Huawei Ascend 910C and Nvidia H20 accelerators, will be able to actively develop the computing infrastructure in China, despite the existing problems that prevent it from doing so efficiently and stably. At the same time, other Chinese developers of AI systems will also be forced to focus on the domestic component base.

The report also cites Huawei’s efforts to develop EUV-class lithography scanners, which would allow Chinese contractors to advance beyond the 7-nanometer process. If successful, this initiative could help Chinese companies overcome barriers set by external political forces.