Huawei Stops Producing Ascend 910 AI Chips at a Loss — Defect Rate Drops to 60%

When Western analysts pointed to the ability of Huawei’s Chinese partners to produce computing accelerators for the company, the emphasis was on the high level of defects and the high cost of such products. According to new data, the yield of Huawei Ascend 910 chips has now doubled to 40% compared to last year. This has allowed Huawei to start making a profit from this area – previously, production was unprofitable.

Image source: Huawei Technologies

The Financial Times reports this with reference to its own sources. It is noted that a year ago, only 20% of the AI ​​accelerator chips produced for Huawei were suitable for their intended purpose. In fact, with a yield of at least 40%, the production of these chips becomes profitable for the first time since launch. If Huawei and its partners manage to raise the yield of good products to 60%, then this figure will put Chinese manufacturers on par with foreign competitors. Huawei intends to achieve this goal, as the source notes.

According to unofficial information, Huawei Technologies founder Ren Zhengfei, in a personal meeting with Chinese leader Xi Jinping last week, said that the situation with the availability of domestic components and software has improved compared to the state at the end of the last century. In this context, the Huawei founder is credited with saying: “I firmly believe that China will grow faster.”

Until 2020, Huawei had the opportunity to order the production of advanced semiconductor components from Taiwan’s TSMC, which it developed in-house, but due to US sanctions, supplies were stopped. The Chinese giant had to rely on the capabilities of national contract manufacturers, whose technological capabilities were at least a couple of generations behind the leading players in the global market. Currently, Huawei receives its most complex components from China’s SMIC, which is also under US sanctions and has barely mastered the production of products using a close analogue of the 7-nm technology of its foreign competitors.

According to sources, Huawei plans to release 100,000 Ascend 910C chips and 300,000 less advanced Ascend 910B chips this year. Last year, about 200,000 units of the latter were released, while the production volumes of the more modern Ascend 910C could not be called significant at all. For comparison, last year, the American company Nvidia was able to sell about 1 million of its anti-sanction H20 accelerators in China for a total of $12 billion. While the supply of such products to China is not prohibited, the H20 accelerators are significantly inferior in performance to those that are allowed to be supplied to countries friendly to the United States.

Accelerators based on the Ascend 910B suffered from poor scalability and problems with the transfer of information between the chip and memory; when creating the Ascend 910C, Huawei tried to eliminate this shortcoming by increasing the memory capacity. The successful implementation of Huawei accelerators in China is also hampered by software problems. The demand for the accelerators of this brand exceeds the supply, so small Huawei customers sometimes find it easier to buy products from competitor Nvidia. In any case, Huawei products currently account for more than three-quarters of the accelerators for artificial intelligence systems manufactured in China. Smaller developers in China do not have enough administrative resources to reserve adequate production capacity from SMIC.