As China grapples with the fallout of U.S. chip sanctions, the semiconductor industry is paying close attention. In the latest development, several Chinese firms are unveiling new artificial intelligence (AI) chips and pursuing advanced research in an effort to achieve AI chip independence. While the global competitiveness of chips will likely be limited due to security concerns, they are crucial for China’s AI hopes.
HiSilicon, a subsidiary of Huawei, has reportedly made substantial progress on independent AI chip research and development. It recently unveiled the Ascend 910B, a cornerstone of Huawei’s cloud infrastructure and a vital component for other Chinese tech firms branching into AI.
Despite this progress, Chinese chipmakers are facing an uphill battle. There are several questions to answer, from production capacity limitations to trade restrictions. Still, experts believe there is room for China’s AI chip market to keep growing in the days ahead.
Huawei’s Ascend 910B chip has turned heads since its debut. Market analysis from TrendForce indicates that it performs similarly to Nvidia’s A800 series but lags slightly behind. Perhaps more notable are the software differences separating the two. Nvidia’s CUDA ecosystem offers efficient performance and has become something of a standard thanks to the ubiquity of the firm’s AI chips. Lacking this makes the Ascend 910B less attractive to many established buyers.
According to TrendForce, “the next-generation Ascend 910B chip is likely manufactured using SMIC’s N+2 process.”
This is notable for two reasons. One, SMIC’s N+2 process capacity is already being filled by orders for Huawei’s smartphone business. Since the latter has boomed in recent months, it may be difficult to find room to manufacture Ascend 910B chips at their needed capacity.
Further complicating matters is SMIC’s status on the U.S. Bureau of Industry and Security’s (BIS) Entity List. Since it was added in 2020, any company wanting to do business with SMIC must first seek approval through the BIS. Securing such approval is quite challenging given the tensions around advanced semiconductor trade. This difficulty will likely limit the impact of the Ascend 910B chip outside of China, where buyers will need to jump through hoops to purchase a product whose performance falls short of Nvidia’s competing offerings.
Experts believe, though, that Chinese firms may still shift toward the Ascend 910B for their AI applications given the state of U.S. chip restrictions. Many believe the existing rules will be expanded soon, which may leave buyers with no choice.
In light of U.S. chip sanctions, Chinese firms are actively pursuing AI chip autonomy. Indeed, President Xi Jinping has made semiconductor independence a top priority for China and has poured trillions of dollars into its domestic industry. Recent data showed that China is projected to lead global chip expansion in 2024, with 18 new fab projects coming online.
Huawei’s HiSilicon isn’t the only player in the AI arena. Baidu is expected to launch the third generation of its Kunlunxin ASIC AI chip at some point this year. The firm uses this self-developed hardware and Huawei’s Ascend 910B chip for its current AI infrastructure.
Elsewhere, Alibaba is also working on ASIC chips of its own. The e-commerce titan acquired Zhongtian Micro Systems and established T-Head Semiconductor in 2018, which led to the development of its Huanguang 800 accelerator. TrendForce reports that Alibaba plans to ramp up its work on next-gen AI chips in 2024 to support its Alibaba Cloud AI infrastructure.
Despite this progress, the Chinese semiconductor industry is staring down significant challenges. Chip restrictions are projected to significantly impact advanced process research and development and hinder the country from producing high-performance AI chips. This is an important trend to monitor in the days ahead as the world prepares for the golden age of AI.