China's dominance in semiconductor equipment procurement is expected to face its first setback since 2021, with spending projected to decrease from $41 billion to $38 billion in 2025, according to semiconductor research firm TechInsights. This 6% decline marks a significant shift for the world's largest buyer of wafer fabrication equipment, whose purchases represented 40% of global sales in 2024. The downturn reflects mounting pressures from both market dynamics and geopolitical constraints. US export controls targeting advanced semiconductor capabilities have intensified while domestic chipmakers grapple with overcapacity in mature node segments. SMIC, China's leading foundry, has already signaled concerns about oversupply risks in this sector, where Chinese manufacturers have rapidly expanded their market share against Taiwanese competitors.

Despite these headwinds, Chinese equipment manufacturers have notably advanced domestic capability development. Naura Technology Group has emerged as the seventh-largest global equipment manufacturer, while AMEC continues to expand its international presence. However, critical gaps persist in China's semiconductor equipment ecosystem, particularly in lithography systems, where dependence on foreign suppliers like ASML remains high. TechInsights data reveals that Chinese companies supplied only 17% of testing tools and 10% of domestic assembly equipment in 2023. The spending reduction comes after a period of aggressive stockpiling prompted by US sanctions to limit Beijing's access to advanced chipmaking capabilities, especially those applicable to artificial intelligence and military applications. However, Chinese manufacturers have demonstrated resilience, with SMIC and Huawei successfully producing advanced chips through alternative, albeit more costly, manufacturing methods.

Huawei Technologies reported a robust 22% year-over-year revenue increase for 2024, reaching 860 billion yuan ($118.27 billion), demonstrating remarkable resilience amid continued US-imposed trade restrictions. The Chinese tech giant's resurgence was primarily driven by its revitalized smartphone division, which captured 16% of China's domestic market share, overtaking Apple in regional sales. This achievement was notably accomplished by deploying domestically produced chipsets, marking a significant milestone for the company. In collaboration with Chinese SMIC, Huawei delivers in-house silicon solutions to integrate with HarmonyOS for complete vertical integration. The company's strategic diversification into automotive technology has emerged as a crucial growth vector, with its smart car solutions unit delivering autonomous driving software and specialized chips to Chinese EV manufacturers.

In parallel, Huawei's Ascend AI 910B/C platform recently announced compatibility with DeepSeek's R1 large language model and announced availability on Chinese AI cloud providers like SiliconFlow. Through a strategic partnership with AI infrastructure startup SiliconFlow, Huawei is enhancing its Ascend cloud service capabilities, further strengthening its competitive position in the global AI hardware market despite ongoing international trade challenges. Even if the company can't compete on performance versus the latest solutions from NVIDIA and AMD due to the lack of advanced manufacturing required for AI accelerators, it can compete on costs and deliver solutions that are typically much more competitive with the price/performance ratio. Huawei's Ascend AI solutions deliver modest performance. Still, the pricing makes AI model inference very cheap, with API costs of around one Yaun per million input tokens and four Yuan per one million output tokens on DeepSeek R1.

When High-Flyer, the hedge fund behind DeepSeek, debuted its flagship model, DeepSeek R1, the tech world went downward. No one expected Chinese AI companies can produce high-quality AI model that rivals the best from OpenAI and Anthropic. While there are rumors that DeepSeek has access to 50,000 NVIDIA "Hopper" GPUs, including H100, H800, and H20, it seems like Huawei is ready to power Chinese AI infrastructure with its AI accelerators. According to the South China Morning Post, Chinese cloud providers like SiliconFlow.cn are offering DeepSeek AI models for inference on Huawei Ascend 910B accelerators. For the price of only one Yuan for one million input tokens, and four Yuan for one million output tokens, this economic model of AI hosting is fundamentally undercutting competition like US-based cloud providers that offer DeepSeek R1 for $7 per million tokens.

Not only is running on the Huawei Ascend 910B cheaper for cloud providers, but we also reported that it is cheaper for DeepSeek itself, which serves its chat app on the Huawei Ascend 910C. Using domestic accelerators lowers the total cost of ownership, with savings passed down to users. If Western clients prefer AI inference to be served by Western companies, they will have to pay a heftier price tag, often backed by the high prices of GPUs like NVIDIA H100, B100, and AMD Instinct MI300X.

Huawei's Ascend 910C AI chip was positioned as one of the better Chinese-developed alternatives to NVIDIA's H100 accelerator—reports from last autumn suggested that samples were being sent to highly important customers. The likes of Alibaba, Baidu, and Tencent have long relied on Team Green enterprise hardware for all manner of AI crunching, but trade sanctions have severely limited the supply and potency of Western-developed AI chips. NVIDIA's region-specific B20 "Blackwell" accelerator is due for release this year, but industry watchdogs reckon that the Ascend 910C AI GPU is a strong rival. The latest online rumblings have pointed to another major Huawei customer—DeepSeek—having Ascend silicon in their back pockets.

DeepSeek's recent unveiling of its R1 open-source large language model has disrupted international AI markets. A lot of press attention has focused on DeepSeek's CEO stating that his team can access up to 50,000 NVIDIA H100 GPUs, but many have not looked into the company's (alleged) pool of natively-made chips. Yesterday, Alexander Doria—an LLM enthusiast—shared an interesting insight: "I feel this should be a much bigger story—DeepSeek has trained on NVIDIA H800, but is running inference on the new home Chinese chips made by Huawei, the 910C." Experts believe that there will be a plentiful supply of Ascend 910C GPUs—estimates from last September posit that 70,000 chips (worth around $2 billion) were in the mass production pipeline. Additionally, industry whispers suggest that Huawei is already working on a—presumably, even more powerful—successor.

A South Korean online retailer has listed Huawei's eKitStore Extreme 200E M.2 NVMe SSD for sale at 47,500 Won ($32) for the 1 TB model. This marks Huawei's entry into consumer storage products after previously only manufacturing server SSDs. The PCIe 4.0 drive's specifications show read speeds of 7,400 MB/s and write speeds of 6,700 MB/s. Beyond confirming the use of QLC memory without a DRAM cache, Huawei has not disclosed the drive's internal components. Due to trade restrictions, both the controller and memory chips likely come from Chinese manufacturers, though specific suppliers remain unknown. Chinese makers have been recorded to use Silicon Motion's SSD controllers, but domestic controllers are also an option here.

Manufacturing costs for similar drives typically exceed $32, raising questions about the pricing strategy. The drive's components could match those used in other brands' SSDs, as multiple storage companies often use identical parts in their products. For NAND Flash, Huawei likely sourced its chips from YMTC, whose Xtacking 4.0 proves to be quite a success. The drive has appeared only at one retailer so far, and Huawei has not announced plans for sales in other regions. This price is notably lower than comparable PCIe 4.0 drives. Common retail prices for 1 TB PCIe 4.0 SSDs are typically more than double this amount. Whether this represents a temporary price or a long-term strategy remains unclear. Perhaps Huawei is operating at a net loss to gain some customers, with possible plans for more SSDs in the future, along with the PCIe 5.0 version.

The Biden administration is set to announce new, targeted restrictions on China's semiconductor industry, focusing primarily on emerging chip manufacturing equipment companies rather than broad industry-wide limitations. According to Bloomberg, these new restrictions are supposed to take effect on Monday. The new rules will specifically target two manufacturing facilities owned by Semiconductor Manufacturing International Corp. (SMIC) and will add select companies to the US Entity List, restricting their access to American technology. However, most of Huawei's suppliers can continue their operations, suggesting a more mild strategy. The restrictions will focus on over 100 emerging Chinese semiconductor equipment manufacturers, many of which receive government funding. These companies are developing tools intended to replace those currently supplied by industry leaders such as ASML, Applied Materials, and Tokyo Electron.

The moderated approach comes after significant lobbying efforts from American semiconductor companies, who argued that stricter restrictions could disadvantage them against international competitors. Major firms like Applied Materials, KLA, and Lam Research voiced concerns about losing market share to companies in Japan and the Netherlands, where similar but less stringent export controls are in place. Notably, Japanese companies like SUMCO are already seeing the revenue impacts of Chinese independence. Lastly, the restrictions will have a limited effect on China's memory chip sector. The new measures will not directly affect ChangXin Memory Technologies (CXMT), a significant Chinese DRAM manufacturer capable of producing high-bandwidth memory for AI applications.

Huawei is advancing archive storage technology with the development of a new solution called the Magneto-Electric Disk (MED). Aiming to provide an alternative to traditional hard drives, this storage device merges tape and SSD technologies to deliver high capacity and low power consumption. The first-generation MED can hold up to 72 TB of data in a compact 7-inch housing and uses significantly less energy than standard HDDs. The MED was developed as part of Huawei's efforts to mitigate potential supply shortages of conventional hard drives, particularly given the US export restrictions to China. By combining tape storage, traditionally slow but reliable, with a high-speed SSD, Huawei has designed a hybrid storage solution that addresses both speed and efficiency needs.

Data is initially recorded on the SSD for quick access and is then written to the tape in sequential blocks for long-term storage. Frequently accessed data, or "warm" data, stays on the SSD for faster retrieval, while "cold" data, accessed less often, is stored on the tape. According to early specifications, a MED rack can store over 10 petabytes and consumes under 2,000 watts of power, significantly less than HDD-based storage. This efficiency could redefine data archiving, especially for large-scale data centers. Data throughput on the MED is projected to reach 8 GB/s, highlighting its potential to handle high-demand environments. The MED is expected to launch in 2025, with a second, more compact generation targeting a 3.5-inch form factor in 2026 or 2027.

According to a recent Reuters report, TSMC has decided to cut off Chinese firm Sophgo following the discovery of TSMC-manufactured components in Huawei's advanced AI processor. The suspension came after technology research firm TechInsights identified a TSMC-manufactured chip within Huawei's Ascend 910B processor during a detailed analysis. This discovery raised significant concerns, as Huawei has been restricted from accessing such technology under US export controls since 2020. TSMC promptly notified US authorities upon learning of the situation and launched an internal investigation. While being sanctioned by the US, Huawei needed to use a proxy firm to get access to high-end silicon manufacturing to produce its Ascend accelerators.

Sophgo, which has ties to cryptocurrency mining equipment manufacturer Bitmain, strongly denies any business relationship with Huawei. The company states it has provided TSMC with a detailed investigation report asserting its compliance with all applicable laws, saying: "SOPHGO has never been engaged in any direct or indirect business relationship with Huawei. SOPHGO has been conducting business in strict compliance with applicable laws and regulations, including but not limited to all the applicable US national export control laws and regulations, and has never been in violation of any of such laws and regulations. SOPHGO has provided detailed investigation report to TSMC to prove that SOPHGO is not related to the Huawei investigation."

Huawei has reportedly started shipping its Ascend 910C accelerator—the company's domestic alternative to NVIDIA's H100 accelerator for AI training and inference. As the report from China South Morning Post notes, Huawei is shipping samples of its accelerator to large NVIDIA customers. This includes companies like Alibaba, Baidu, and Tencent, which have ordered massive amounts of NVIDIA accelerators. However, Huawei is on track to deliver 70,000 chips, potentially worth $2 billion. With NVIDIA working on a B20 accelerator SKU that complies with US government export regulations, the Huawei Ascend 910C accelerator could potentially outperform NVIDIA's B20 processor, per some analyst expectations.

If the Ascend 910C receives positive results from Chinese tech giants, it could be the start of Huawei's expansion into data center accelerators, once hindered by the company's ability to manufacture advanced chips. Now, with foundries like SMIC printing 7 nm designs and possibly 5 nm coming soon, Huawei will leverage this technology to satisfy the domestic demand for more AI processing power. Competing on a global scale, though, remains a challenge. Companies like NVIDIA, AMD, and Intel have access to advanced nodes, which gives their AI accelerators more efficiency and performance.

A new forecast from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker shows shipments of personal computing devices are expected to grow 2.6% year over year in 2024 to 398.9 million units. The traditional PC market will remain flat in 2024 with 261 million units shipped while the tablet market is forecast to grow 7.2% year over year as a refresh cycle and project investments are expected to drive the market.

For traditional PCs, the global market excluding China is expected to grow 2.8% in 2024 as China continues to suffer through a confluence of macroeconomic challenges, including high youth employment, deflation, and a tumultuous real estate market. However, China's economic concerns have largely impacted just the PC market as tablet demand has proven to be more resilient thanks to Huawei's efforts.

Amidst escalating tensions in the U.S.-China semiconductor industry, Huawei is reportedly working on a new AI chip called the Ascend 910C. This development appears to be the Chinese tech giant's attempt to compete with NVIDIA's AI processors in the Chinese market. According to a Wall Street Journal report, Huawei has begun testing the Ascend 910C with various Chinese internet and telecom companies to evaluate its performance and capabilities. Notable firms such as ByteDance, Baidu, and China Mobile are said to have received samples of the chip.

Huawei has reportedly informed its clients that the Ascend 910C can match the performance of NVIDIA's H100 chip. The company has been conducting tests for several weeks, suggesting that the new processor is nearing completion. The Wall Street Journal indicates that Huawei could start shipping the chip as early as October 2024. The report also mentions that Huawei and potential customers have discussed orders for over 70,000 chips, potentially worth $2 billion.

TrendForce's latest industry report on AI servers reveals that high demand for advanced AI servers from major CSPs and brand clients is expected to continue in 2024. Meanwhile, TSMC, SK hynix, Samsung, and Micron's gradual production expansion has significantly eased shortages in 2Q24. Consequently, the lead time for NVIDIA's flagship H100 solution has decreased from the previous 40-50 weeks to less than 16 weeks.

TrendForce estimates that AI server shipments in the second quarter will increase by nearly 20% QoQ, and has revised the annual shipment forecast up to 1.67 million units—marking a 41.5% YoY growth.

When NVIDIA started preparing the H20 GPU for China, the company anticipated great demand from sanction-obeying GPUs. However, we now know precisely what the company makes from its Chinese venture: an astonishing $12 billion in take-home revenue. Due to the massive demand for NVIDIA GPUs, Chinese AI research labs are acquiring as many as they can get their hands on. According to a report from Financial Times, citing SemiAnalysis as its source, NVIDIA will sell over one million H20 GPUs in China. This number far outweighs the number of home-grown Huawei Ascend 910B accelerators that the Chinese companies plan to source, with numbers being "only" 550,000 Ascend 910B chips. While we don't know if Chinese semiconductor makers like SMIC are capable of producing more chips or if the demand isn't as high, we know why NVIDIA H20 chips are the primary target.

The Huawei Ascend 910B features Total Processing Performance (TPP), a metric developed by US Govt. to track GPU performance measuring TeraFLOPS times bit-length of over 5,000, while the NVIDIA H20 comes to 2,368 TPP, which is half of the Huawei accelerator. That is the performance on paper, where SemiAnalysis notes that the real-world performance is actually ahead for the H20 GPU due to better memory configuration of the GPU, including higher HBM3 memory bandwidth. All of this proves to be a better alternative than Ascend 910B accelerator, accounting for an estimate of over one million GPUs shipped this year in China. With an average price of $12,000 per NVIDIA H20 GPU, China's $12 billion revenue will undoubtedly help raise NVIDIA's 2024 profits even further.

The PC (desktops, notebooks, and workstations) market in Mainland China is forecast to contract by 1% in 2024 according to the latest Canalys data. The first quarter of the year already saw a sharp decline, with shipments down 12%, in contrast to the global market which returned to growth. Desktop shipments are expected to perform well in 2024, growing 10% annually as they benefit from commercial sector refresh demand, especially from large state-held enterprises and local governments. Notebook shipments are set to drop 5%, as demand from consumers and the private sector is anticipated to remain cautious on short-term expenditure such as PCs.

China's PC market trajectory is diverging from global trends in its recovery journey. In Q1 2024, the commercial sector bore the brunt of the market downturn, undergoing a 19% decline due to weak IT spending by large enterprises. The decline in consumer shipments was milder, with shipments dropping 8%. However, despite the muted performance in 2024, significant local developments point to a stronger market in 2025, in which PC shipments are expected to grow 12%.

According to The Information, in a strategic maneuver to circumvent the constraints imposed by US sanctions, Huawei is accelerating efforts to establish domestic production capabilities for High Bandwidth Memory (HBM) within China. This move addresses the limitations that have hampered the company's advancements in AI and high-performance computing (HPC) sectors. HBM technology plays a pivotal role in enhancing the performance of AI and HPC processors by mitigating memory bandwidth bottlenecks. Recognizing its significance, Huawei has assembled a consortium comprising memory manufacturers backed by the Chinese government and prominent semiconductor companies like Fujian Jinhua Integrated Circuit. This consortium is focused on advancing HBM2 memory technology, which is crucial for Huawei's Ascend-series processors for AI applications.

Huawei's initiative comes at a time when the company faces challenges in accessing HBM from external sources, impacting the availability of its AI processors in the market. Despite facing obstacles such as international regulations restricting the sale of advanced chipmaking equipment to China, Huawei's efforts underscore China's broader push for self-sufficiency in critical technologies essential for AI and supercomputing. By investing in domestic HBM production, Huawei aims to secure a stable supply chain for these vital components, reducing reliance on external suppliers. This strategic shift not only demonstrates Huawei's resilience in navigating geopolitical challenges but also highlights China's determination to strengthen its technological independence in the face of external pressures. As the global tech landscape continues to evolve, Huawei's move to develop homegrown HBM memory could have far-reaching implications for China's AI and HPC capabilities, positioning the country as a significant player in the memory field.

The US government is investigating the potential national security risks associated with China's involvement in the development of open-source RISC-V chip technology. According to a letter obtained by Reuters, the Department of Commerce has informed US lawmakers that it is actively reviewing the implications of China's work in this area. RISC-V, an open instruction set architecture (ISA) created in 2014 at the University of California, Berkeley, offers an alternative to proprietary and licensed ISAs like those developed by Arm. This open-source ISA can be utilized in a wide range of applications, from AI chips and general-purpose CPUs to high-performance computing applications. Major Chinese tech giants, including Alibaba and Huawei, have already embraced RISC-V, positioning it as a new battleground in the ongoing technological rivalry between the United States and China over cutting-edge semiconductor capabilities.

In November, a group of 18 US lawmakers from both chambers of Congress urged the Biden administration to outline its strategy for preventing China from gaining a dominant position in RISC-V technology, expressing concerns about the potential impact on US national and economic security. While acknowledging the need to address potential risks, the Commerce Department noted in its letter that it must proceed cautiously to avoid unintentionally harming American companies actively participating in international RISC-V development groups. Previous attempts to restrict the transfer of 5G technology to China have created obstacles for US firms involved in global standards bodies where China is also a participant, potentially jeopardizing American leadership in the field. As the review process continues, the Commerce Department faces the delicate task of balancing national security interests with the need to maintain the competitiveness of US companies in the rapidly evolving landscape of open-source chip technologies.

According to ChinaScope, an effort is currently underway to strengthen Huawei's HarmonyOS platform's presence. The local government of Shenzhen has unveiled an ambitious program aimed at supercharging the development of native applications for the operating system. The "Shenzhen Action Plan for Supporting the Development of Native HarmonyOS Open Source Applications in 2024" outlines several key goals to foster a more robust and competitive ecosystem around HarmonyOS. One primary objective is for Shenzhen-based HarmonyOS apps to account for over 10% of China's total by the end of 2024. To facilitate this, the city plans to establish at least two specialized industrial parks dedicated to HarmonyOS software development across various application domains.

Furthermore, the initiative calls for over 1,000 software companies in Shenzhen to obtain HarmonyOS development talent qualifications, underscoring the city's commitment to cultivating a skilled workforce for the platform. Perhaps most impressively, the action plan encourages eligible companies to ramp up their outsourcing services for HarmonyOS app development, with a lofty target of reaching 500,000 HarmonyOS developers. This would represent a significant influx of developer talent focused on the platform if achieved. The Shenzhen government's push aligns with China's broader strategy to reduce reliance on foreign technologies and promote the adoption of domestic alternatives like HarmonyOS. While initially launched by Huawei as a workaround for U.S. sanctions, HarmonyOS has since expanded to power many devices, including smartphones, tablets, smartwatches, and TVs.

According to Bloomberg's latest investigation, Huawei and Semiconductor Manufacturing International Corporation (SMIC) have submitted patents on the self-aligned quadruple patterning (SAQP) pattern etching technique to enable SMIC to achieve 5 nm semiconductor production. The two Chinese giants have been working with the Deep Ultra Violet (DUV) machinery to develop a pattern etching technique allowing SMIC to produce a node compliant with the US exporting rules while maintaining the density improvements from the previously announced 7 nm node. In the 7 nm process, SMIC most likely used self-aligned dual patterning (SADP) with DUV tools, but for the increased density of the 5 nm node, a doubling to SAQP is required. In semiconductor manufacturing, lithography tools take multiple turns to etch the design of the silicon wafer.

Especially with smaller nodes getting ever-increasing density requirements, it is becoming challenging to etch sub-10 nm designs using DUV tools. That is where Extreme Ultra Violet (EUV) tools from ASML come into play. With EUV, the wavelengths of the lithography printers are 14 times smaller than DUV, at only 13.5 nm, compared to 193 nm of ArF immersion DUV systems. This means that without EUV, SMIC has to look into alternatives like SAQP to increase the density of its nodes and, as a result, include more complications and possibly lower yields. As an example, Intel tried to use SAQP in its first 10 nm nodes to reduce reliance on EUV, which resulted in a series of delays and complications, eventually pushing Intel into EUV. While Huawei and SMIC may develop a more efficient solution for SAQP, the use of EUV is imminent as the regular DUV can not keep up with the increasing density of semiconductor nodes. Given that ASML can't ship its EUV machinery to China, Huawei is supposedly developing its own EUV machines, but will likely take a few more years to show.

Chinese e-commerce and cloud giant Alibaba announced its plans to launch a server-grade RISC-V processor later this year, and it showcased a RISC-V-powered laptop running an open-source operating system. The announcements were made by Alibaba's research division, the Damo Academy, at the recent Xuantie RISC-V Ecological Conference in Shenzhen. The upcoming server-class processor called the Xuantie C930, is expected to be launched by the end of 2024. While specific details about the chip have not been disclosed, it is anticipated to cater to AI and server workloads. This development is part of Alibaba's ongoing efforts to expand its RISC-V portfolio and reduce reliance on foreign chip technologies amidst US export restrictions. To complement the C930, Alibaba is also preparing a Xuantie 907 matrix processing unit for AI, which could be an IP block inside an SoC like the C930 or an SoC of its own.

In addition to the C930, Alibaba showcased the RuyiBOOK, a laptop powered by the company's existing T-Head C910 processor. The C910, previously designed for edge servers, AI, and telecommunications applications, has been adapted for use in laptops. Strangely, the RuyiBOOK laptop runs on the openEuler operating system, an open-source version of Huawei's EulerOS, which is based on Red Hat Linux. The laptop also features Alibaba's collaboration suite, Ding Talk, and the open-source office software Libre Office, demonstrating its potential to cater to the needs of Chinese knowledge workers and consumers without relying on foreign software. Zhang Jianfeng, president of the Damo Academy, emphasized the increasing demand for new computing power and the potential for RISC-V to enter a period of "application explosion." Alibaba plans to continue investing in RISC-V research and development and fostering collaboration within the industry to promote innovation and growth in the RISC-V ecosystem, lessening reliance on US-sourced technology.

A 2019-signed export license has allowed Intel to supply laptop processors to Huawei, under an exclusive deal—this US Government approved arrangement was not viewed favorably by AMD. The rival chipmaker apparently missed out on the securing of a similar trade license back in 2021. According to a new Reuters report, Team Red and a handful of supporters have attempted to revoke Intel's license—worth hundreds of millions of dollars. Two anonymous sources allege that: "Intel has survived an effort to halt chip sales to Huawei...giving one of the world's largest chipmakers more time to sell to the heavily sanctioned Chinese telecoms company." Intel and Huawei's symbiosis is set to end later this year—folks on the inside reckon that the current US administration will not approve a renewal. Reports suggest that Qualcomm is not anticipating a renewal either—Huawei is an approved buyer of Snapdragon chips, but industry whispers indicate an eventual shift to in-house fare.

Intel, Huawei, US Commerce Department and the White House have declined to comment on the aforementioned scenario. Reuters also sent a query to AMD, but the publication did not receive a response. Earlier last year, a government official revealed that "Huawei's licensing policy" was under review, alongside a general push to scrap a number of trade deals. According to insiders, the same government official allegedly told companies—in private—that the US Commerce Department would fix "the licensing discrepancy." Another anonymous source believes that the agency shelved these plans late last year, for reasons unknown—they stressed that there is potential for a revival. Given the upcoming expiry of Intel and Huawei's arrangement—within the year—it makes little sense to implement a drastic change.

SMIC, China's largest semiconductor manufacturer, is reportedly assembling a dedicated team to develop 3 nm semiconductor node technology, following reports of the company setting up 5 nm chip production for Huawei later this year. This move is part of SMIC's efforts to achieve independence from foreign companies and reduce its reliance on US technology. According to a report from Joongang, SMIC's initial goal is to commence operations of its 5 nm production line, which will mass-produce Huawei chipsets for various products, including AI silicon. However, SMIC is already looking beyond the 5 nm node. The company has assembled an internal research and development team to begin work on the next-generation 3 nm node.

The Chinese manufacturer is expected to accomplish this using existing DUV machinery, as ASML, the sole supplier of advanced EUV technology, is prohibited from providing equipment to Chinese companies due to US restrictions. It is reported that one of the biggest challenges facing SMIC is the potential for low yields and high production costs. The company is seeking substantial subsidies from the Chinese government to overcome these obstacles. Receiving government subsidies will be crucial for SMIC, especially considering that its 5 nm chips are expected to be up to 50 percent more expensive than TSMC's due to the use of older DUV equipment. The first 3 nm wafers from SMIC are not expected to roll out for several years, as the company will prioritize the commercialization of Huawei's 5 nm chips. This ambitious undertaking by SMIC represents a significant challenge for the company as it strives to reduce its dependence on foreign semiconductor technology and establish itself as an essential player in the global manufacturing industry.

According to the latest report from Bloomberg, AMD has hit a roadblock in offering its top-of-the-line AI accelerator in the Chinese market. The newest AI chip is called Instinct MI309, a lower-performance Instinct MI300 variant tailored to meet the latest US export rules for selling advanced chips to China-based entities. However, the Instinct MI309 still appears too powerful to gain unconditional approval from the US Department of Commerce, leaving AMD in need of an export license. Originally, the US Department of Commerce made a rule: Total Processing Performance (TPP) score should not exceed 4800, effectively capping AI performance at 600 FP8 TFLOPS. This rule ensures that processors with slightly lower performance may still be sold to Chinese customers, provided their performance density (PD) is sufficiently low.

However, AMD's latest creation, Instinct MI309, is everything but slow. Based on the powerful Instinct MI300, AMD has not managed to bring it down to acceptable levels to acquire a US export license from the Department of Commerce. It is still unknown which Chinese customer was trying to acquire AMD's Instinct MI309; however, it could be one of the Chinese AI labs trying to get ahold of more training hardware for their domestic models. NVIDIA has employed a similar tactic, selling A800 and H800 chips to China, until the US also ended the export of these chips to China. AI labs located in China can only use domestic hardware, including accelerators from Alibaba, Huawei, and Baidu. Cloud services hosting GPUs in US can still be accessed by Chinese companies, but that is currently under US regulators watchlist.

At MWC Barcelona 2024, Huawei launched the Huawei OptiXtrans DC908 Pro, a new platform for Data Center Interconnect (DCI) designed for the intelligent era. This innovative platform ensures the efficient, secure, and stable transmission of data between data centers (DCs), setting a new standard for DCI networks. As AI continues to proliferate across various service scenarios, the demand for foundation models has intensified, leading to an explosion in data volume. DCs are now operating at the petabyte level, and DCI networks have evolved from single-wavelength 100 Gbit/s to single-wavelength Tbit/s.

In response to the challenges posed by massive data transmission in the intelligent era, Huawei introduces the next-generation DCI platform, the Huawei OptiXtrans DC908 Pro. Compared to its predecessor, the DC908 Pro offers higher bandwidth, reliability, and intelligence.

Huawei's new server CPU based on the HiSilicon Taishan V120 core has shown impressive single-threaded performance that matches AMD's Zen 3 architecture in a leaked Geekbench 6 benchmark. The Taishan V120 is likely being manufactured on SMIC's 7 nm process node. The Geekbench 6 result posted on social media does not identify the exact Huawei server CPU model, but speculation points to it being the upcoming Kunpeng 930 chip. In the benchmark, the Taishan V120 CPU operating at 2.9 GHz scored 1527 in the single-core test. This positions it nearly equal to AMD's EPYC 7413 server CPU based on the Zen 3 architecture, which boosts up to 3.6 GHz and which scored 1538 points. It also matches the single-threaded performance of Intel's Coffee Lake-based Xeon E-2136 from 2018, even though that Intel chip can reach 4.5 GHz boost speeds, scoring 1553 points.

The Taishan V120 core first appeared in Huawei's Kirin 9000 smartphone SoC in 2020. Using the core in server CPUs would allow Huawei to achieve competitive single-threaded performance to rival AMD's last-generation EPYC Milan and Intel's older Skylake server chips. Multi-threaded benchmarks will be required to gauge the Kunpeng 930's overall performance fully when it launches. Huawei continues innovating its ARM-based server CPU designs even while facing restrictions on manufacturing and selling chips internationally due to its inclusion on the US Entity List in 2019. The impressive single-threaded results versus leading x86 competitors demonstrate Huawei's resilience and self-reliance in developing homegrown data center technology through its HiSilicon division. More details on the Kunpeng 930 server chip will likely surface later this year, along with server configurations from Chinese OEMs.

Global technology brand HONOR today unveiled the HONOR MagicBook Pro 16, a revolutionary AI-powered laptop which sets to redefine the traditional laptop landscape. Based on HONOR's platform-level AI capabilities and joint efforts with technology partners such as Microsoft, Intel and NVIDIA, HONOR is bringing PCs into the AI PC era, marking a significant milestone in computing, offering users an unparalleled AI experience and transforming their device interactions.

"At HONOR, our commitment lies in embracing open collaboration with industry partners to foster a flourishing ecosystem. We firmly believe in the transformative power of collaborative synergy, especially in the era of AI. By leveraging the collective expertise of top industry players, we are dedicated to crafting exceptional products and delivering unparalleled experiences to consumers worldwide," said George Zhao, CEO at HONOR.