Anamika Dey, editor
Brief news
- Huawei is set to introduce a new chip for artificial intelligence use, challenging Nvidia in the Chinese market despite U.S. sanctions.
- The new chip, Ascend 910C, is said to be comparable to Nvidia’s H100, which is not directly available in China.
- Huawei has encountered production delays in its current processors and is at risk of additional U.S. restrictions that could impact its supply of machine components and memory processors.
Detailed news
Huawei Technologies is on the brink of introducing a new chip for artificial intelligence use, overcoming U.S. sanctions to challenge Nvidia NVDA 6.53%increase; green up indicating triangle in the Chinese market.
In recent weeks, Huawei’s most recent processor, the Ascend 910C, has been under testing by Chinese internet companies and telecommunications operators, according to sources familiar with the matter. The individuals stated that Huawei informed prospective clients that the new chip is comparable to Nvidia’s H100, which was introduced last year and is not directly available in China.
The most recent indication of Huawei’s ability to penetrate U.S.-imposed barriers and create Chinese alternatives to products manufactured by the U.S. and its allies is the company’s continued advancement in semiconductors. It has emerged as a national leader in fields such as artificial intelligence and is a critical component of Beijing’s initiative to eliminate American technologies, with the assistance of billions of dollars in state funding.
Nevertheless, the individuals have reported that Huawei has encountered production delays in its current processors. It is at risk of additional U.S. restrictions that could result in the deprivation of machine components and the most recent memory processors utilized in AI hardware.
According to the sources, preliminary discussions regarding the acquisition of the 910C are underway among various organizations, including the parent company of TikTok, ByteDance, and the search engine behemoth Baidu. Additionally, the state-owned telecommunications carrier China Mobile is involved. According to them, the preliminary negotiations between Huawei and potential consumers suggest that the total value of the orders will exceed $2 billion, with an estimated total of over 70,000 processors.
The individuals stated that Huawei intends to commence shipping as early as October. The final purchases may differ from the initial plans, and the delivery schedule may be altered. They advised caution. A Huawei representative declined to provide a response.
Since 2019, Huawei has been included on the U.S. entity list, indicating that Washington regards the company as a national-security concern. This has prevented it from utilizing facilities in countries such as Taiwan to produce its processors and has impeded its access to essential components and manufacturing equipment.
China has increased its support for semiconductor manufacturing and in May, it closed the third installment of a national investment fund for the industry, which raised $48 billion.
Huawei’s latest AI processor is designed to address the gap left by Nvidia following the implementation of U.S. export controls in 2022, which effectively prohibited the Santa Clara, Calif.-based company from providing its most advanced chips to Chinese customers. Despite the fact that some individuals in China have discovered alternative methods to obtain its more powerful processors, Nvidia continues to develop less-powerful variants for China that adhere to the export regulations.
The H20, a degraded version of its AI processors, is the only option available to Chinese customers who purchase from Nvidia. This spring, Nvidia introduced the H20 in order to comply with Washington’s regulations regarding sales to China.
On the other hand, in the United States, Nvidia’s most recent Blackwell processors and the GB200 line of hardware that are powered by them will be available to clients such as OpenAI, Amazon, and Google in the near future. Nvidia has stated that these chips are several times more potent than its current hardware.
According to sources with knowledge of the situation, Nvidia is developing an additional processor that is specifically designed for China, known as B20. However, the design may encounter difficulties in obtaining U.S. approval for export to China if the White House tightens its regulations.
Dylan Patel, an analyst at SemiAnalysis, an industry research firm, perceived Huawei’s 910C as a technological advancement that could outperform Nvidia’s B20.
He stated that “Nvidia would lose market share in China rapidly” if Huawei is able to effectively manufacture its new chip and Nvidia is still unable to offer advanced chips to Chinese clients.
According to SemiAnalysis, Huawei has the potential to manufacture 1.3 million to 1.4 million 910C processors next year, provided that it does not encounter any additional U.S. restrictions.
The Wall Street Journal reported that Chinese consumers were initially skeptical of Nvidia’s H20, as they were uncertain whether it was substantially superior to Huawei’s most recent product.
Nevertheless, some clients increased their H20 orders after Nvidia reduced prices and favorable performance results were observed in evaluations of larger H20 clusters, according to sources familiar with the matter. Additionally, Huawei’s production bottlenecks were a factor.
In July, SemiAnalysis predicted that Nvidia would sell more than one million H20 processors in China this year, with a value of approximately $12 billion. According to SemiAnalysis, the quantity of processors sold would be nearly double the quantity that Huawei is anticipated to sell of its 910B.
According to sources with knowledge of the situation, the Ascend 910B, Huawei’s most advanced AI processor, has experienced some delays this year as a result of U.S. sanctions.
In response to prospective U.S. restrictions on China’s access to high-bandwidth memory chips, which are utilized in cutting-edge AI processors, Huawei has initiated the stockpiling of these chips in recent weeks, according to the sources. The U.S. Commerce Department frequently updates sanctions and export controls, and industry professionals anticipate additional action this year.
The individuals stated that Huawei has instructed its local contract manufacturer and suppliers to store an increased quantity of machine components in anticipation of the possibility that production remedies may reduce the lifespan of certain components and that it may encounter difficulties in sourcing them.
In June, a Huawei executive disclosed that nearly half of China’s large language models were trained using Huawei’s processors at a semiconductor industry conference. He stated that the 910B has outperformed the A100 from Nvidia in the context of training models.
The 910 series was competitive with the A100, according to a June analysis conducted by the Center for Security and Emerging Technology, a policy research body at Georgetown University. However, it encountered substantial challenges, such as low yield and limited manufacturing capacity. It stated that the 910B chip has fewer active AI processors, which are essential components for computation, in comparison to Huawei’s previous version. Consequently, it was not a significant improvement.
Source : wsj.com, CNBC News.
