Huawei Technologies is poised to begin mass shipments of its advanced AI chips, the Ascend 910C and the upcoming Ascend 920, to Chinese customers, marking a pivotal moment in the AI hardware sector amidst ongoing U.S. export restrictions.

In response to geopolitical pressures, Chinese companies are actively seeking alternatives to Nvidia, increasingly turning to Huawei's offerings.

The Chinese government is increasingly relying on local manufacturers like Semiconductor Manufacturing International Corp (SMIC) to produce AI accelerators, leveraging available technology to bolster domestic capabilities.

Analysts forecast that by 2030, Chinese companies could dominate the chip market, with Huawei at the forefront due to its competitive pricing and strong local policy support.

The Ascend 910C chip merges features from previous models to deliver performance levels that rival Nvidia's H100 chip, showcasing Huawei's advancements in AI technology.

The anticipated production capacity for the Ascend 910C could reach 400,000 chips monthly by the end of 2025, while the next-generation Ascend 920 is projected to be 30% to 40% more efficient than its predecessor.

Despite its advancements, Huawei faces production challenges due to SMIC's technology lagging behind TSMC's, raising concerns about the reliability of supply chains.

Huawei has successfully improved its chip production yield from 20% to 40%, which has made the production of its Ascend chips profitable for the first time, with aspirations to reach a 60% yield standard.

To address ongoing chip shortages, Chinese AI firms are diversifying their partnerships beyond traditional American suppliers, looking to European and Asian manufacturers for support.

The recent export ban underscores China's vulnerability in securing advanced AI hardware, as the country imported $385 billion worth of semiconductor chips in 2024, reflecting a 10.4% increase from the previous year.

Transitioning from Nvidia's proprietary CUDA software to Huawei's chips presents significant challenges for Chinese AI companies, requiring substantial labor and time to adapt.

The Ascend 910C is competitive with Nvidia's H800 in floating point performance and surpasses it in memory capacity and bandwidth, marking a significant achievement for Chinese technology.