Huawei’s Ascend 910C AI chip represents a pivotal moment in China’s technological advancement, much like the earlier “DeepSeek”events. Despite facing stringent restrictions from the United States, Huawei appears to continue sourcing critical components from TSMC through various third-party avenues.
Huawei’s Strategic Sourcing from TSMC Amid US Restrictions Raises Questions on Trade Policies
Huawei is keenly focused on launching its next-generation Ascend AI chip, which could alter the competitive landscape between China and the United States in the realm of AI hardware. Insights from SemiAnalysis indicate that despite the recent US-imposed trade ban, Huawei has been acquiring TSMC chips in substantial quantities. This situation raises concerns about the effectiveness of the trade restrictions initially enacted during the Trump administration.
One common misconception is that Huawei’s 910C is made in China. It is entirely designed there, but China still relies heavily on foreign production. Whether it be HBM from Samsung, wafers from TSMC, or equipment from America, Netherlands, and Japan, there is a big reliance on foreign industry.
– SemiAnalysis
The Ascend 910C is expected to leverage TSMC’s advanced 7nm process technology. TechInsights further notes that a significant number of AI chips in the market still depend on foreign semiconductors. Notably, while China’s own foundry, SMIC, provides a 7nm process, Huawei appears reluctant to utilize this option, citing concerns about the process’s maturity. Reports suggest Huawei may have spent approximately $500 million on TSMC’s 7nm chips via Sophgo, a Chinese entity previously restricted by Taiwanese authorities.
Previously, TSMC was fined $1 billion when its chips were discovered in Huawei’s Ascend 910B AI processors, leading it to cease all sales to Chinese companies. Nevertheless, it appears that Huawei has found ways to access TSMC chip supplies, potentially through stockpiling prior to the enforcement of export controls. According to claims from SemiAnalysis, Huawei is still able to procure these chips via a third-party firm, although this information remains unverified.
The overarching strategy of imposing restrictions on China appears to have backfired for the United States, as many American tech companies have found ways to access cutting-edge AI hardware—either through exploiting loopholes or tapping into black market sources.
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