Huawei's Ascend 910C: A Game-Changer in China's AI Chip Self-Sufficiency Drive
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Huawei’s Ascend 910C AI chip is poised to redefine China’s technological sovereignty in the AI hardware race. Amid escalating U.S. export restrictions on NVIDIA’s GPUs, Huawei’s 2025 mass production targets and yield improvements signal a critical turning point in Beijing’s push to reduce reliance on Western semiconductor giants. Here’s why investors should pay close attention.
The Ascend 910C: Performance, Production, and Profitability
Huawei’s Ascend 910C combines two 910B processors into a single package, delivering 60–80% of NVIDIA’s H100 GPU inference performance at a fraction of the cost. Key milestones include:
- 2025 Production Targets: 100,000 units of the 910C and 300,000 units of the older 910B (up from zero 910C and 200,000 910B in 2024).
- Yield Rates: Improved to 40% by late 2024 (up from 20% in early 2024), with a 60% target by 2025—industry-standard levels.
- Profitability: The 40% yield marked the first time Ascend production became profitable, a critical step toward scalability.
Huawei’s stock (though not publicly traded) reflects investor sentiment on its technological resilience. Despite U.S. sanctions, its AI chip progress has bolstered confidence in its long-term viability.
U.S. Sanctions: Accelerating China’s AI Chip Autonomy
The U.S. export ban on NVIDIA’s H20 and H100 GPUs to China has created a $15 billion revenue opportunity for Huawei and domestic rivals like Cambricon. Key dynamics:
- Market Shift: NVIDIA’s China revenue, once 10–13% of its total, is projected to drop to nearly zero by early 2025 as Chinese firms pivot to Ascend 910C and other本土 (domestic) chips.
- Strategic Partnerships: Huawei’s collaboration with AI startups like DeepSeek (which uses Ascend for inference tasks) underscores its push to build an ecosystem rivaling NVIDIA’s CUDA.
- Geopolitical Impact: Analysts warn U.S. restrictions may backfire, incentivizing China to allocate $150 billion annually to its semiconductor sector through 2025.
Challenges Ahead: Yield, Supply Chains, and Performance Gaps
Despite progress, hurdles remain:
- Manufacturing Limits: Huawei relies on SMIC’s 7nm N+2 process, which lacks access to extreme ultraviolet (EUV) lithography due to U.S. sanctions. This limits yields compared to TSMC’s 60% for NVIDIA’s H100.
- Cost Pressures: SMIC charges a 50% premium for advanced-node chips, while Huawei’s older TSMC components (pre-2020) are dwindling.
- Performance Lag: The 910C trails NVIDIA’s next-gen Grace Blackwell Superchip, risking a widening gap unless China accelerates its semiconductor infrastructure (e.g., EUV adoption).
NVIDIA’s China sales have plummeted as sanctions bite, creating space for Huawei to capture market share. However, its $12 billion in 2024 H20 sales highlights lingering demand for its hardware.
Market Opportunities and Investment Implications
- Huawei’s Ecosystem Play: The CANN software platform aims to rival CUDA, leveraging partnerships with Alibaba, Baidu, and DeepSeek. Investors should monitor adoption rates and software ecosystem growth.
- SMIC’s Role: As Huawei’s key foundry partner, SMIC’s ability to scale yields and manage costs will determine Ascend’s profitability.
- Global Competition: By 2025, Huawei’s 910C could rival nvidia in niche markets (e.g., inference tasks) but faces hurdles in high-end training workloads dominated by Blackwell.
Conclusion: A New Era of Tech Decoupling
Huawei’s 2025 targets mark a pivotal step in China’s AI chip self-sufficiency. With 40% yields now commercially viable and 100,000 units planned, the Ascend 910C is no longer a niche product but a credible alternative to NVIDIA. While performance gaps persist, geopolitical forces are accelerating adoption, reducing NVIDIA’s dominance and reshaping global AI infrastructure.
Investors should note:
- Risks: SMIC’s yield constraints, U.S. sanctions on TSMC/SMIC collaborations, and NVIDIA’s potential countermeasures (e.g., faster EUV adoption).
- Opportunities: Huawei’s software ecosystem growth, SMIC’s valuation (if listed), and China’s $150B annual semiconductor spend.
In a world of tech decoupling, the Ascend 910C isn’t just a chip—it’s a symbol of Beijing’s resolve to control its AI destiny. For investors, this is a long game, but one where the stakes are rising exponentially.
Data Sources: Financial Times, Reuters, SemiAnalysis, ICSmart, and internal estimates.
