Huawei's AI Chip Production Capped at 200,000 Units by 2025 Due to U.S. Restrictions

Huawei Technologies is projected to produce no more than 200,000 advanced artificial intelligence (AI) chips by 2025, according to a warning issued by the U.S. Commerce Department to lawmakers. This figure, while significant, falls short of China’s domestic demand for such technology, indicating the impact of U.S. restrictions on Huawei’s production capabilities.

Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, emphasized during a congressional hearing that while Huawei’s projected output remains limited, it should not lead to complacency in Washington. Kessler noted that China is investing heavily to increase its AI chip production and capabilities, suggesting a growing momentum in the country’s bid to rival U.S. chip supremacy. This warning underscores the rising tensions between the U.S. and China as both nations push to close the technological gap.

Since 2019, Huawei and other major Chinese firms have faced sweeping U.S. export restrictions that bar access to high-end American chips and manufacturing tools. These measures are part of a broader effort to curb China’s military and technological advancement. Despite these sanctions, Huawei has continued developing its Ascend 910C AI chips as a domestic substitute for Nvidia’s cutting-edge GPUs, which dominate the global market but are now largely unavailable to Chinese firms due to U.S. controls.

Kessler stated that the bulk of Huawei’s chips will likely be used within China, with the production capacity for 2025 estimated to be at or below 200,000 units. This assessment came days after White House AI Director David Sacks indicated that China was only three to six months behind the U.S. in artificial intelligence capabilities. However, a White House clarification later noted that while China’s AI models are close to parity, its AI chips trail by one to two years.

Huawei is rapidly trying to bridge this gap. CEO Ren Zhengfei stated that the company’s chips remain a generation behind their American counterparts but that Huawei is pumping more than $25 billion annually into research and development to close the divide. The semiconductor face-off is part of a more sweeping geopolitical clash, with both nations investing heavily in research and development to maintain their competitive edge in the AI race.

The U.S. government’s strategy involves a delicate balance between national security and global trade. The Commerce Department closely monitors the process, ensuring that strong export controls remain in place. Kessler noted that while there are no current plans for new restrictions, the landscape is constantly evolving, and controls must remain effective. This tightrope walk continues as China’s growing tech ambitions force Washington to reassess its strategic position in the AI arms race.