Can Huawei Outpace U.S. Sanctions with Advanced Chip Production?

American officials have long comforted themselves with the belief that Huawei, under sanctions since 2019, can only produce a limited number of 7nm process chips. Recently, the U.S. Commerce Secretary emphasized that the annual production of advanced chips by all Chinese companies shouldn’t exceed 200,000 units. However, reports suggest Huawei’s capabilities may be underestimated.

U.S. Sanctions and Chinese Chip Production

According to Bloomberg, Howard Lutnick from the U.S. government estimates the annual output of all advanced Chinese chips, including smartphone and AI accelerator components, to be limited. His statement, “They say they’re producing them, but they aren’t,” implies skepticism about China’s chip production capacity.

Huawei’s Real Production Numbers

Unlike the American assessments, The Wall Street Journal reports that Huawei is expected to deliver over 800,000 Ascend 910B and 910C accelerators this year. If smartphone chip production is included, Huawei’s capabilities appear much higher than U.S. estimates. Despite differing views, these forecasts remain unverified.

Impact on the AI Server Market

TrendForce analysts anticipate that due to U.S. sanctions on foreign AI computing accelerators, their share in China’s AI server market may drop from 63% to 42% this year. Meanwhile, local companies like Huawei could increase their share to 40%, echoing Nvidia’s concerns about U.S. export restrictions fueling Chinese advancements.

The evolving dynamic between U.S. policymakers and Chinese semiconductor firms could reshape global tech landscapes, with Huawei potentially leading a surge in domestic chip production.