In a surprising twist of fate, U.S. sanctions aimed at diminishing Huawei's foothold in the semiconductor market have inadvertently given the Chinese tech giant a substantial advantage. The ban on Nvidia's H20 AI accelerator shipments to China has opened the door for Huawei to enhance its market presence with its AI chips, particularly the newly launched Ascend 920. This article explores how the very policies designed to stifle Huawei's growth may have played a significant role in its resurgence.
Following the U.S. prohibition against Nvidia shipping its advanced H20 AI accelerator to China, demand for Huawei's AI chips has surged within the country. Huawei has unveiled its cutting-edge AI accelerator, the Ascend 920, which is reportedly fabricated by China’s largest semiconductor foundry, SMIC. Notably, there are revelations surrounding the production methods for this new chip.
Although SMIC has previously faced restrictions that prevented it from acquiring extreme ultraviolet lithography (EUV) machines necessary for producing chips at nodes smaller than 7nm, recent reports suggest that the Ascend 920 was manufactured using a 6nm process node. Analytics indicate that SMIC might have achieved this through older Deep Ultraviolet Lithography (DUV) methods combined with multi-patterning techniques, enabling the fabrication of smaller patterns on silicon wafers by executing multiple precise alignments.
Furthermore, SMIC's N+3 process is believed to be comparable to a 6nm technology, making it feasible for the company to realize this advanced production without EUV technology. As a result, the Ascend 920 AI accelerator competes with Nvidia's H20, boasting an impressive processing capability at 900 TFLOPS—30% to 40% faster than its 7nm predecessor, the Ascend 910C, and featuring a memory bandwidth of 4 TB/s, surpassing that of the Ascend 910C.
Ironically, U.S. regulations are not just hindering Chinese imports of Nvidia chips, they are also facilitating Huawei's rise in the domestic AI accelerator market. Obtaining special licenses to import Nvidia's H20 chip is cumbersome, allowing Huawei to capture market share relatively easily since no such procedures are needed for domestic purchases of its Ascend AI accelerators.
Thus, the very sanctions meant to undermine Huawei’s competitive standing have paradoxically fostered its growth, leading to a slowdown in Nvidia’s revenue from the Chinese market.
