Huawei Faces Setbacks in AI Chip Production Due to U.S. Sanctions

U.S. trade restrictions limit Huawei's chip advancements, keeping its AI processors on outdated 7nm technology through 2026.

Huawei plans to mass-produce its latest AI chip, the Ascend 910C, in early 2025, but significant yield issues persist due to U.S. export controls.
The company's reliance on China's SMIC for chip manufacturing has resulted in low yields, with the 910C achieving only 20%, far below the 70% needed for commercial viability.
U.S. sanctions have blocked China's access to advanced EUV lithography equipment, leaving SMIC stuck on older DUV machinery and unable to progress beyond the 7nm process until at least 2026.
Huawei's AI chips lag behind global competitors like Nvidia, with TSMC preparing to launch 2nm technology while Huawei remains three generations behind.
Chinese government-backed efforts to achieve semiconductor self-sufficiency face challenges, as Huawei and SMIC struggle to meet domestic demand and improve production capabilities.