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

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.

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