Huawei's Struggles with AI Chip Yields at Chinese SMIC Fab

July 2, 2024 Hardware

Huawei, the Chinese tech behemoth, is reportedly grappling with subpar artificial intelligence (AI) chip yields at the Semiconductor Manufacturing International Corporation (SMIC), according to Tom's Hardware. The unfavorable yields could potentially hinder Huawei's development and production of AI chips, a vital aspect of its business strategy, and further exacerbate the company's challenges amidst the ongoing US sanctions.

The SMIC, the largest foundry in China, has been Huawei's ally in its fight for survival as the US sanctions have cut the tech giant from global chip supplies. However, the low yield rates of AI chips, which are essential components in a variety of applications such as smartphones, data centers, and autonomous vehicles, pose a significant setback.

The report suggests that the yield rate of Huawei’s Ascend 910 AI processors, which are produced using the SMIC's 14nm process, is just 50%. This means that only half of the produced chips meet the required performance and quality standards. This low yield is far from the industry standard of 90% to 95% for an established process like the 14nm node.

This is a particularly pressing issue for Huawei as it is highly reliant on SMIC following the US sanctions that have cut off its supply from the world's largest chip manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC). The US administration restricted companies using US technology, such as TSMC, from servicing Huawei without a relevant license.

The low yield rates could potentially disrupt Huawei's AI chip supply chain, affecting its ability to produce smartphones and other products that heavily rely on these chips. This is crucial as Huawei's smartphone business significantly contributes to its revenue.

Furthermore, Huawei’s Ascend AI chips are a critical part of its business strategy. The Ascend 910, for instance, is billed as the world's most potent AI processor. It is used in data centers to power machine learning and other advanced AI applications. The disruption in the production of these chips could, therefore, pose challenges to Huawei's ambition to lead in AI technology.

While SMIC has been making strides in advancing its technology, it is still lagging compared to other global foundries. The low yield of Huawei's AI chips highlights the challenges Chinese companies face in their bid to achieve chip self-sufficiency amidst the ongoing US-China technology cold war.

In conclusion, Huawei's struggle with low AI chip yields at SMIC is a significant setback in its battle for survival under the US sanctions. The situation underscores the complexities and challenges in the global semiconductor supply chain, particularly for companies like Huawei who are caught in geopolitical crossfires. If SMIC can improve its yield rates, it could bolster Huawei's resilience amidst its ongoing challenges. However, it remains to be seen how the tech giant will navigate these difficulties in its pursuit of AI technology leadership.

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