Huawei, China's only real hope for homegrown AI hardware in volume, prioritizes Ascend AI processors over Kirin smartphone chips

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AI servers bring more money, right?

Huawei
(Image credit: Huawei)

Semiconductor Manufacturing International Corp. (SMIC) produces Huawei's HiSilicon Kirin 9000S processors for smartphones as well as the Ascend 910B chips for artificial intelligence. Both use the company's 2nd generation 7nm-class process technology, and many wondered whether the Chinese foundry could produce enough of such chips. Apparently not, as Huawei is now prioritizing production of its Ascend processors, reports Reuters.

Huawei's HiSilicon Kirin 9000S and Ascend 910B processors are made at the same SMIC fab that's capable of making chips on the company's 7nm-class process technology using deep ultraviolet (DUV) lithography tools. Apparently, production capacity of the facility is limited and demand for Huawei's latest silicon is significant, which is why Huawei has to choose whether to sell smartphones based on the HiSilicon Kirin 9000S or AI servers featuring Ascend 910B.

Selling servers certainly earns Huawei more money. Furthermore, for technology giant Huawei, developing AI prowess is considerably more important than competing against Apple and Samsung on the smartphone front, and it's also important for China's hopes to compete in the AI space. The Ascend 910B is considered one of the most competitive 'non-Nvidia' AI processors in China (according to the Reuters report), so demand for this part is likely very high. That's why Huawei is prioritizing production of its Ascend 910B processors over its Kirin 9000S system-on-chips, according the report that cites three people with knowledge of the matter.

Earlier today it was also reported (albeit based on an unofficial report) that SMIC charges Huawei significantly more for its services than TSMC did. Furthermore, Huawei's 2nd generation 7nm-class process technology is not as good as TSMC's 5nm and 7nm nodes from a yields standpoint, which makes the whole project quite an expensive endeavor.

To stay competitive in the long term, Huawei has to develop its own artificial intelligence hardware and software. As a result, it need to prioritize production of AI processors over production of smartphone processors.

What remains to be seen is how Huawei and SMIC solve the insufficient capacity issue going forward. SMIC's rumored DUV-only 5nm-class process technology will require more process steps and therefore capacity of the Shanghai fab. As long as demand remains high, it will likely be unable to make both smartphone and AI processors in sufficient quantities.

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

4 Comments Comment from the forums
  • Findecanor
    I'm afraid that this, and a significant portion of the current AI chip craze in China is with the intention of having the CCP's surveillance apparatus as customer.

    Huawei ties with that is exactly the first stated reason why the U.S. and others have issued sanctions against the company.
    Reply
  • xterx1234
    Findecanor said:
    I'm afraid that this, and a significant portion of the current AI chip craze in China is with the intention of having the CCP's surveillance apparatus as customer.

    Huawei ties with that is exactly the first stated reason why the U.S. and others have issued sanctions against the company.
    Any evidence and sources about this statement? Or it is just how the US blames Huawei for everything with no evidence. Also, government agencies in other countries were "forced"by the US to ban Huawei. But we cannot deny that Huawei have connections to the Chinese government just like US companies having connections with the US gov itself.
    Reply
  • Yoinksss
    How disastrous will things be for Intel and AMD in the Chinese market when China's Loongson chips catch up? Will they lodge a complaint to US congress about China not buying their stuff anymore?

    Take Huawei and NVDIA

    NVDIA produces the world's best quality chips. Unfortunately China is the only Non European or Japanese or American market that can effectively buy these Chips and leapfrog themselves and also the evolution of these Chips to the next generation at a much faster rate

    Now that NVDIA doesn't sell its top chips to China and sells a watered down version, the Chinese are looking towards local suppliers and manufacturers because the Quality edge is no longer as significant as it was when NVDIA was selling its best Chips



    Huawei and Tencent slowly fill the space with their Chips that are certainly 95% or even on par with NVDIAs watered down version but almost 35% lower in cost

    As more and more Chips of Huawei and Tencent sell, it's likely both entities will evolve their Chip designs and manufacturing at a much faster rate than NVDIA can because NVDIA doesn't have access to one of the world's top markets anymore for it's best Chips

    NVDIA instead gets a handout from the Federal Government of $ 3.5 Billion a year as part of the CHIPS act plus a subsidy of $ 2 Billion a year to make up for it's potential Chinese losses

    So NVDIA doesn't even need an alternate market for it's best Chips

    It's Subsidy plus it's G7 Markets are enough

    However the EVOLUTION is going to be slowed down

    Chinese Chips will evolve faster because they have access to the world's fastest growing market

    This isn't new

    Protectionism over Economics has always been an unmitigated disaster

    We Indians had some of the finest toolmaking industries in the world in the 1950s

    We had excellent steel working factories

    We made good quality machines

    Then in 1977, we introduced PROTECTIONISM and cut out imports.

    Without COMPETITION, our entire production quality crashed and crashed and crashed some more

    By 2010, our Steel, our Tools, our Machines were three levels more inferior to global standards

    It's why China encourages CUT THROAT COMPETITION and doesn't reciprocate by banning Apple from it's markets or other brands

    Competition and Free Market Access is the only way to make Technology grow

    Sadly the Dumbo leaders in the West can't see this Problem because they are ELECTED and so automatically chosen for factors other than BRAINS and ABILITY

    They know neither Economics nor Science (And apparently No Geography either)

    Ultimately Chinese Chips will replace Western Chips and have the same or better quality

    It's Economics and that hasn't changed for millennia

    Once it's likely Sumerians were awed at the Astonishing weaponry of the Old Egyptians and their technology

    Likewise once the Americans were awed at the British Technology like Radars and Spinning Jennys

    -Kanthaswamy Balasubramaniam
    Reply
  • bradnak
    Another article based on SPECULATION and not FACTS

    Please tell us what you KNOW
    Not what you THINK

    Everyone has an opinion
    Very few have FACTS
    Reply