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The biggest beneficiary of US attempts to impede Chinese artificial intelligence progress appears to be Huawei.
January 8, 2024
In its increasingly futile attempt to put the Chinese technological genie back in the bottle, the US regularly bans certain products made by domestic companies from being sold to Chinese ones. Over the past year AI emerged as a major front in that war. China is arguably already ahead of the US in many aspects of AI development but is still reliant on US company Nvidia for the super-powerful chips required to run the technology.
Not unreasonably, the US has therefore calculated that denying China the best Nvidia has to offer will give it a significant advantage over China in the strategically important AI race. For a lot of last year, it seems Chinese companies were happy to buy sub-flagship Nvidia chips, so the US decided to restrict them even further. It seems that may have marked the inflection point at which the further degraded chips were considered not worth the hassle and expense.
According to the WSJ’s handy ‘people familiar with the matter’, Chinese internet companies have been buying Huawei’s new Ascend 910B AI chip in their thousands. The clear inference is that, while not as good as the best Nvidia has to offer, they are better, or at least better value, than whatever the US is allowing Nvidia to sell into China. And certainly a major improvement on their predecessors.
Not much is known about the Ascend 910B, but analyst firm TrendForce recently published a research note on the chip, speculating that it is produced by China’s leading foundry SMIC on a 7nm process. That’s still a couple of generations behind what TSMC and Samsung are capable of, but still fairly advanced.
The WSJ piece concludes that this is the inevitable consequence of US sanctions. China has been pouring resources into its domestic semiconductor sector since the US initiated tech hostilities and, while it’s unlikely to ever completely catch up with TSMC (which adds considerable salt to the festering Taiwan wound), it may well do enough to stay competitive.
Huawei, of course, has been especially blighted by US sanctions, so the irony would be complete if the production of AI chips for Chinese tech giants such as Alibaba, Tencent, and Baidu, as well as all kinds of chips for its own smartphones, form the basis of the company’s recovery.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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