Report: Huawei’s Ascend AI chip production yield increases to 40%.

      Huawei has raised the yield rate of its latest Ascend series AI chips from 20% to almost 40% over the last year, as reported by sources referenced by the Financial Times. This increase indicates the first profitable run for the production line for the Chinese technology firm. The company aims to boost the yield to 60%, which corresponds to the industry benchmark for similar chips, according to these sources.

      The significance of this development lies in Huawei's enhanced yield rate for its Ascend AI chips, representing a crucial advancement in China's pursuit of technological self-sufficiency. In light of US export restrictions, this progress bolsters China's endeavors to lessen dependency on US chipmaker NVIDIA, especially in the swiftly expanding AI sector.

      In detail, Huawei collaborated with the state-owned chip manufacturer Semiconductor Manufacturing International Corp (SMIC), which is currently under US sanctions, to produce its Ascend chip. Austin Lyons, a semiconductor analyst at consultancy Creative Strategies, indicated that a yield of 40% could make Huawei’s chip commercially viable, comparable to TSMC’s 60% yield for NVIDIA's H100 AI processor, according to the Financial Times.

      Huawei’s Ascend AI chips are produced by SMIC using the N+2 process, which does not rely on extreme ultraviolet (EUV) lithography technology for manufacturing advanced chips. Due to US-led export controls, mainland China is unable to acquire EUV equipment from the Dutch chip manufacturing equipment leader ASML.

      The Financial Times reported that Huawei intends to create 100,000 Ascend 910C processors and 300,000 Ascend 910B processors this year, as per sources familiar with the situation. Last year, the company produced 200,000 Ascend 910B processors, while production of the Ascend 910C has not yet commenced.

      As of now, NVIDIA continues to surpass Huawei in AI chip sales within mainland China, according to the Financial Times. The consultancy SemiAnalysis estimated that NVIDIA generated $12 billion from selling one million of its H20 chips to China last year. NVIDIA is only permitted to sell its H20 AI chips in China due to US export limitations that bar the sale of advanced chips with high-performance capabilities, such as the H100. The H20 AI chip, designed specifically for the Chinese market, is a modified version of the H100, offering less than 15% of the AI computing power of its counterpart.