Overview

• Under Secretary Jeffrey Kessler testified that Huawei’s Ascend AI chip production capacity for 2025 will not exceed 200,000 units.
• He told lawmakers that most or all of those chips will be delivered to companies inside China under current export restrictions.
• The Commerce Department is seeking congressional funding for 200 additional enforcement officers and expanded overseas teams to crack down on smuggling and diversion networks.
• Analysts note that China’s domestic demand for AI accelerators topped 1.5 million units in 2024, meaning Huawei’s projected output would cover less than 15 percent of the market.
• Despite sanctions and technology gaps that leave its chips at least one generation behind US rivals, Beijing is investing heavily in semiconductor research and production to close the divide.