Huawei to Double Output of Top AI Chip

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Transcript

00:00We're talking about the 910C Ascend chip, right? This is kind of the marquee of Huawei.

00:05Talk us through the numbers that we learned in the course of reporting about the next two years.

00:10Right. Huawei, of course, is probably best known for its communications equipment,

00:15had smartphones for a long time, too. But it is also really the leading developer of

00:19semiconductors within China. It's put a ton of research and development into this process,

00:24and it's made quite a bit of progress. So what sources are telling us is that the company is

00:29preparing to ramp up production of some of these high-end chips that would be used to run AI

00:35models within the country and also train some models in the country. As you mentioned, the 910C

00:40is the most advanced chip that they have on the market right now. We understand from sources

00:45they'll produce about 300,000 this year, and they're planning on ramping that up to about 600,000

00:51next year. That's not enough to meet all of the domestic supply, but they're hitting the market

00:56at a very vulnerable moment for NVIDIA. NVIDIA had hoped to be able to sell a bunch of chips into

01:01China. There's a very vibrant AI scene there. Companies want to buy their chips. But there have

01:06been these geopolitical tensions where the H20 chip was banned for a while. Then Washington allowed

01:11it to be sold. But then Beijing pushed back and said they don't want their companies to buy that

01:15chip right now. So as NVIDIA stalls, Huawei is racing ahead and trying to fill that market need.

01:21CameraCon Technologies also trying to race ahead. This is a moment for domestic chip-making talent,

01:28but ultimately we're still worried about how SMIC can actually produce or manufacture and how powerful

01:33any of these next iterations that Eric Hsu, the rotating leader of the business, can actually be

01:39compared to NVIDIA. It seems as though analysts think they're not going to nearly rival the GPUs in

01:43the next iteration from NVIDIA. Right. They're still very far behind NVIDIA. I mean,

01:48NVIDIA is the most valuable company in the world. They have tons of resources to be able to throw at

01:53this. And obviously they've helped companies in the U.S. like OpenAI and Microsoft a ton on this

01:58front. Now, Beijing is very concerned about that reliance on American technology at this critical

02:04juncture. So as Xi Jinping and President Donald Trump enter into these trade negotiations,

02:10they have many issues on their plate, including TikTok. The Communist Party wants to do whatever they

02:15can to be able to wean themselves off of that American technology. So they poured a ton of

02:19resources into building these domestic capabilities. As you mentioned, CabraCon is coming on, one of the

02:24upstarts that's probably most promising in the market. And then Huawei is also spending a lot of money on this

02:30front. Alibaba, the e-commerce company, is investing in semiconductors, too. So you're seeing really this

02:36nationwide effort to try to make some progress in chip production. Again, they're very far behind what the

02:41Americans can do and the Taiwanese can do right now. But they are making progress. And I think what

02:45sources are telling us now is they're making progress over the next year to an extent that we had not

02:50anticipated.