In the ever-evolving world of technology, Huawei has been a key player in the smartphone industry for many years. However, recent reports suggest that the Chinese tech giant is reevaluating its smartphone production strategy due to heightened demand for its artificial intelligence (AI) chips.
According to sources familiar with the matter, Huawei is facing an unprecedented surge in appetite for its AI chips, which has prompted the company to prioritize AI production and slow down the manufacturing of its premium Mate 60 phones. This move comes at a time when Huawei has secured the top spot in Chinese smartphone sales for the first time in over three years, reflecting the global competition for AI functionality amid the Sino-US technological standoff.
The sources revealed that Huawei employs a single facility for both Ascend AI chips and Kirin chips, which power its smartphones. However, production has been impeded by a low yield rate, indicating challenges in production quality. This has led to a prioritization of Ascend chip production over Kirin chips, resulting in the slowdown in manufacturing for Mate 60 smartphones.
The impact of US restrictions on the sale of AI processing chips to China is evident, as the country seeks alternatives to US-controlled Nvidia. China’s initiative to enhance its computing power has led to increased demand for Huawei’s Ascend series, especially in data center projects. The Ascend 910B, considered a competitive non-Nvidia AI chip in China, has gained traction.
However, the production bottleneck has also affected other Huawei products, including the Ascend-equipped computing unit MDC 810, causing delays in flagship model deliveries for Chinese automakers. Despite the challenges, Huawei is actively working to improve its yield rate, with hopes that this production adjustment is temporary.
While Huawei has been discreet about its chip manufacturing capabilities, recent developments indicate progress in producing advanced chips. The Mate 60 series, featuring a Chinese-made chip capable of fifth-generation (5G) telecommunication speeds, contributed significantly to Huawei regaining its status as China’s top smartphone seller.
A Huawei spokesperson declined to comment on the situation, emphasizing the challenges the company faces in navigating the complex landscape of chip production amid geopolitical tensions.
The news of Huawei’s reevaluation of its smartphone production strategy has sparked interest and concern in the tech industry. Many are closely watching the company’s next moves and the impact it could have on the global smartphone market.
In conclusion, the surge in demand for Huawei’s AI chips has led to a temporary slowdown in the manufacturing of its premium Mate 60 phones. The company is facing challenges in production quality and yield rates, and is prioritizing AI production over smartphone manufacturing. The situation sheds light on Huawei’s struggles since the 2019 US sanctions, and the company is actively working to improve its chip production capabilities. The industry awaits further developments from Huawei and the potential impact on the global smartphone market.