Despite Chip Progress, Huawei Facing Export Control, Production Hurdles, Report Says

Although Huawei has been able to overcome strict U.S. export controls to design advanced, high-performing chips in recent years (see 2403070059, 2309190052 and 2309120005), a report this month from Georgetown University's Center for Security and Emerging Technology suggests that Huawei’s chip performance increase is “smaller than advertised” and the company still faces significant production limits.

CSET said Huawei “faces numerous challenges” meeting domestic Chinese demand for its most advanced artificial intelligence-related semiconductors produced by China’s Semiconductor Manufacturing International Corp. The report said this is mostly because SMIC’s yield rates and cost efficiency “appear to be low, making this an expensive endeavor for Huawei, SMIC, and their government backers.”

“These challenges will likely continue to limit China’s access to advanced AI chips, at least in the short term, until SMIC is able to improve yields and bring more production capacity online,” the report said, adding that the future of Huawei’s progress in AI chip technology “will depend on whether the company can make consistent, transformative design and packaging innovations to compensate for the manufacturing improvements denied to China by U.S. export controls.”