Washington Highlights Production Limits for Huawei
The United States government has expressed concerns about China's ability to scale up domestic production of advanced artificial intelligence chips by
Huawei in 2025. According to recent statements, U.S. officials believe Huawei will not be able to manufacture more than 200,000 AI chips in the coming year, despite recent breakthroughs in Chinese semiconductor technology. These concerns reflect ongoing efforts by the U.S. to curb China’s ambitions in AI through export controls and technology restrictions.
Huawei’s AI Chips Face Yield Challenges
Reports from industry analysts suggest that while Huawei has ambitious plans, severe production yield issues pose significant hurdles. Industry sources estimate that:
- The company’s flagship Ascend AI chips, including the Ascend 910a, 910b, and 910c, are targeted to reach up to 700,000 units in total shipments for 2025.
- Production yield rates for these chips remain low, estimated at around 30% due to reliance on 7nm deep ultraviolet (DUV) lithography, a process less advanced than the extreme ultraviolet (EUV) methods used globally.
- Yield limitations are expected to keep actual available chip volumes much lower than the announced targets.
These chips are deemed comparable in performance to leading U.S. AI accelerators, such as the NVIDIA H100, especially in the Chinese market, where U.S. export controls have restricted access to the latest
ChatGPT-class technologies and hardware
[1].
The Competitive Landscape and Supply Chain Dynamics
The production struggle is intensified as U.S. measures, such as the ban on exporting high-end GPUs (like the China-specific NVIDIA H20) to China, force companies like Huawei to fill the gap. The reduced availability of high-performance import options makes Huawei’s products increasingly attractive for domestic buyers. However, meeting this demand is another challenge due to manufacturing yield issues and ongoing U.S. pressure on China’s access to essential chip-making tools
[1].
China’s Semiconductors Supply Chain Strategies
To mitigate these barriers, China has developed creative supply chain solutions. For example, despite export bans on high-bandwidth memory (HBM), Chinese firms have leveraged suppliers from South Korea and alternative packaging strategies to amass HBM stockpiles essential for AI chip production. These workarounds allow Chinese manufacturers to maintain some momentum, even as they remain unable to fully replicate global technologies domestically
[3].
Conclusion: Intensifying U.S.-China Tech Rivalry
The U.S.’s assertion that Huawei is unlikely to exceed 200,000 AI chip shipments in 2025 reflects deep skepticism over China’s ability to overcome the technical and geopolitical headwinds. At the same time, Huawei and the broader Chinese semiconductor ecosystem are adapting quickly, deploying both new chip architectures and innovative supply arrangements to maintain competitiveness. The outcome will be crucial in shaping the future landscape of global AI and semiconductor leadership.
