Huawei Technologies Co. is preparing to step up its production of advanced artificial intelligence chips despite persistent US sanctions and manufacturing hurdles.
The Shenzhen-based company, working with Semiconductor Manufacturing International Corp. (SMIC), aims to distribute as many as 1.6 million Ascend dies in 2026, up from about 1 million this year.
The move marks an effort to supply domestic demand in China, where companies including Alibaba, Tencent, and DeepSeek require millions of processors to run AI services.
Huawei’s strategy signals Beijing’s broader push for semiconductor self-reliance in the face of restrictions on US-based Nvidia.
Huawei expands Ascend production targets
Huawei plans to manufacture about 600,000 of its Ascend 910C chips in 2026, doubling output from 2025 levels. Together with other models in the series, total production could reach 1.6 million dies.
These estimates include stock held in inventory and account for manufacturing yields, the rate of functional chips that pass quality checks.
The company was previously constrained by sanctions that restricted its access to advanced manufacturing tools.
However, it has increased production since mid-2025 by working with SMIC to improve yields on its 7-nanometre fabrication process.
Huawei’s current flagship 910C chips combine two dies into one package, but the method has proved difficult, contributing to shortages.
Competition with Nvidia intensifies
Nvidia, which sold about 1 million H20 processors to China in 2024, has been unable to maintain sales after new export controls. The company admitted in its most recent earnings call that it did not record any sales of the H20 in the last quarter.
In contrast, Huawei has started positioning itself as the primary supplier of AI accelerators to China’s domestic market.
Despite production gains, Huawei’s chips lag Nvidia in raw computing performance.
Analysts estimate that the Ascend 950, scheduled for release, will deliver only about 6% of the processing capability of Nvidia’s VR200 superchip.
Currently, Huawei processors are mostly used for inferencing rather than training large models.
Long-term roadmap for new designs
In September, Huawei unveiled a roadmap outlining its chip development until 2028. The plan includes the introduction of Ascend 950, 960, and 970 models, each designed for gradual performance improvements.
A new chip, internally called the 910D and later confirmed as the 950DT, is expected by late 2026, with production goals of about 100,000 units.
The 950DT will feature four dies in a single chipset, a significant design shift.
Huawei also revealed its UnifiedBus interconnect protocol, enabling as many as 15,488 Ascend chips to be linked together, providing an alternative way to scale computing power despite limits in chip performance.
China’s self-reliance push
China’s technology firms have been under pressure to secure reliable chip supplies as geopolitical restrictions cut access to foreign processors.
While yields on domestic 7nm processes remain low, recent advances by Shanghai Micro Electronics Equipment Group and other local firms suggest improvements are being made.
Huawei’s growing chip production highlights how Chinese companies are adjusting to restricted access to global semiconductor supply chains.
If the company can sustain its output goals, it may help reduce reliance on imports and support the country’s large-scale AI projects.
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