[Huawei](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360), one of the biggest phone makers in the world, is reportedly prioritizing manufacturing AI chips, and slowing down production for the chips needed to power the latest [Mate 60 phones](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360), people familiar with the matter told Reuters. The company uses one manufacturing plant to produce both its Ascend AI chips and the Kirin chips, Reuters reported, and the facility has had low production. Quartz reached out for comment. Following the US’s latest AI chip restrictions to China in October 2023, Chinese AI companies have been having a hard time sourcing the necessary chip components for their own AI products. US-based Nvidia made up 90% of the AI Chinese chip sales market, according to Reuters. So Chinese companies are looking for domestic chip alternatives to power their own generative AI products, and the Ascend 910B is considered the most competitive non-Nvidia AI chip available in China. China is also in a global race for AI dominance. Since the release of ChatGPT in November 2022, Chinese tech giants like Baidu have scrambled to make AI chatbots that rival US counterparts. What does that mean for Huawei’s phones? ---------------------------------------- It’s not clear what the production changes mean for the company’s smartphone business. In the first two weeks of the year, Huawei topped China’s smartphone sales, according to a report by research firm Counterpoint, as [cited by South China Morning Post](https://www.scmp.com/tech/tech-war/article/3251007/huawei-reclaims-top-spot-chinas-smartphone-sales-ranking-its-first-time-back-company-was-added-us). The resurgence was reportedly driven by the release of its Mate 60 Pro 5G smartphone. Shoppers have complained of months-long waiting times for pre-orders of Mate 60 phones to be fulfilled. Our free, fast, and fun briefing on the global economy, delivered every weekday morning.

Long-time Slashdot reader [AmiMoJo](/~AmiMoJo) quotes _Tom's Hardware_: _A Geekbench 6 result features what is likely the first-ever look at the single-core performance of the Taishan V120, developed by Huawei's HiSilicon subsidiary (via @Olrak29\_ [on X](https://twitter.com/Olrak29_/status/1761583109261181189)). The single-core score indicates that Taishan V120 cores are roughly on par with AMD's Zen 3 cores from late 2020, which could mean Huawei's technology isn't that far behind cutting-edge Western chip designers. The Taishan V120 core was first spotted in [Huawei's Kirin 9000s smartphone chip](https://www.tomshardware.com/news/die-shot-of-hisilicons-sanction-busting-kirin-9000s-chip-revealed), which uses four of the cores alongside two efficiency-focused Arm Cortex A510 cores. Since Kirin 9000s chips are produced using SMIC's second-generation 7nm node ([which may make it illegal to sell internationally](https://www.tomshardware.com/news/chinas-smic-allegedly-violated-us-sanctions-selling-chips-to-huawei) according to U.S. lawmakers), it would also seem likely that the Taishan V120 core tested in Geekbench 6 is also made on the second-generation 7nm node. The benchmark result doesn't really say much about what the actual CPU is, with the only hint being 'Huawei Cloud OpenStack Nova.' This implies it's a Kunpeng server CPU, which may either be the Kunpeng 916, 920, or 930. While we can only guess which one it is, it's almost certain to be the 930 given the high single-core performance shown in the result. By contrast, [the few Geekbench 5 results](https://browser.geekbench.com/v5/cpu/search?utf8=%E2%9C%93&q=Kunpeng+920) for the Kunpeng 920 show it performing well behind AMD's first-generation Epyc Naples from 2017. _

Despite tightened controls on shipments of advanced AI chips and semiconductor tools to China from U.S. companies, one of the country’s top technology manufacturers was reportedly [able to use U.S. technology to make a breakthrough chip last year](https://www.bloomberg.com/news/articles/2024-03-08/huawei-chip-breakthrough-used-tech-from-two-us-gear-suppliers?sref=P6Q0mxvj). Huawei Technologies and its partner Semiconductor Manufacturing International Corp. (SMIC) used tech from California-based Applied Materials Inc. and Lam Research Corp. to [make an advanced 7-nanometer chip used in Huawei’s Mate 60 Pro smartphone](https://www.bloomberg.com/news/articles/2024-03-08/huawei-chip-breakthrough-used-tech-from-two-us-gear-suppliers?sref=P6Q0mxvj), sources told Bloomberg. The chip, which was made with tech from the U.S. companies as well as Dutch semiconductor company ASML Holding NV, is not as advanced as chips from other firms, but is still ahead of [where the U.S. wants its chip war rival to be](https://qz.com/1859534/why-a-taiwanese-chip-maker-is-at-the-heart-of-us-china-tech-fight). In October, Bloomberg reported [SMIC used tech from ASML to make an advanced chip](https://www.bloomberg.com/news/articles/2023-10-25/controversial-chip-in-huawei-phone-was-produced-on-asml-machine?sref=P6Q0mxvj) for Huawei’s smartphone. SMIC was already in possession of the U.S. tech used to build the chip before the U.S. Department of Commerce [barred U.S. companies from supplying Chinese companies with advanced chips and chipmaking equipment](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) in October 2022, sources told Bloomberg. The U.S. also banned the approval of equipment from Huawei and other Chinese companies in November 2022, alleging it posed “an unacceptable risk” to national security. The commerce department hasn’t seen evidence that the advanced chips can be made “at scale” by SMIC, Bloomberg reported. Neither Huawei, SMIC, Applied Materials, nor Lam Research immediately responded to a request for comment from Quartz. Huawei saw high demand for its Mate 60 smartphone series in the first six weeks of 2024, while [Apple saw its iPhone sales in China fall 24% year-over-year](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851308057) during the same period. However, overall smartphone sales in China were down 7% year-over-year for the first six weeks of the year.

Chinese telecoms gear company Huawei Technologies has reported its profit more than doubled last year as its cloud and digital businesses thrived in spite of U.S. sanctions HONG KONG -- Chinese telecoms gear company Huawei Technologies has reported its profit more than doubled last year as its cloud and digital businesses thrived in spite of U.S. sanctions. The Shenzhen-based company reported a net profit of 87 billion yuan ($12 billion), helped by strong sales and an improved product portfolio. Revenue jumped nearly 10% from a year earlier, to 704.2 billion yuan ($97.4 billion). Huawei’s rotating chairman Ken Hu said the company’s figures were in line with forecasts. “We’ve been through a lot over the past few years. But through one challenge after another, we’ve managed to grow,” Hu said. Huawei also said it profited from “gains from the sales of some businesses.” It did not specify which businesses were sold. Huawei, one of [China](https://abcnews.go.com/alerts/Taiwan)’s first global tech brands, has been caught up in China-U.S. tensions over technology and security. The U.S. has banned U.S. companies from doing business with Huawei, cutting off its access to computer chips and software such as Google services for its smartphones and preventing it from selling its telecommunications gear to U.S. customers. Washington says Huawei poses a threat to U.S. national security. Huawei denies that. Huawei has refocused its business on cloud computing services and helping industries to shift to more digital operations. Revenues from its cloud computing business grew almost 22% year-on-year in 2023 to 55.3 billion yuan ($7.7 billion). Sales for its digital power business grew 3.5%. Its automotive services related sales more than doubled. Huawei’s consumer unit, which sells smartphones and other devices, posted a 17.3% jump in revenue in 2023. Last year, Huawei launched its high-end Mate 60 smartphone line, powered by an advanced chip that it made together with China’s Semiconductor Manufacturing International Corporation (SMIC). “In 2024, we will further expand our presence in the high-end market by working with ecosystem partners worldwide to bring more innovative products and services to consumers across the globe,” the company said in a statement to the AP. The launch of the Mate 60 prompted speculation that Huawei and China may be able to produce 5G chips. U.S. lawmakers later accused SMIC of violating U.S. sanctions by supplying chips to Huawei. [Taiwan](https://abcnews.go.com/alerts/Taiwan) also launched an investigation into four local companies over reports that they helped Huawei in its chip efforts. Some of the companies said they were offering wastewater and environmental protection services unrelated to critical technology. Huawei is one of the world’s biggest spenders in research and development. In 2023, it invested 164.7 billion yuan ($22.8 billion) into R&D, accounting for almost a quarter of its annual revenue. Just over half of Huawei’s 207,000 employees work in R&D.

Despite taking a [hit to its smartphone business under U.S. sanctions](https://www.wsj.com/articles/u-s-set-out-to-hobble-chinas-huawei-and-so-it-has-11633617478?mod=article_inline), China’s Huawei saw its profits more than double in 2023, boosted by sales of its new smartphone in the country. Huawei said Friday that its [profits increased more than 140% from the same period a year ago](https://qz.com/huawei-s-profit-more-than-doubles-in-2023-sales-up-9-6-1851373720) to 87 billion yuan, or $12 billion. It [reported revenue at $99 billion](https://www.wsj.com/business/earnings/huaweis-2023-net-profit-more-than-doubled-as-revenue-rose-b1b6d971), according to The Wall Street Journal — a 10% increase from the previous year. Huawei said the profit increase was driven by more sales of consumer electronics, such as its Mate 60 Pro smartphone, which has 5G-like capabilities powered by a Chinese-made chip. It also attributed profit growth to more cloud computing offerings, improved operations, the sale of some businesses, and its automobile solutions business. While [overall smartphone sales in China were down 7% year-over-year](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851308057) during the first six weeks of 2024, Huawei has seen a resurgence in the country after releasing its Mate 60 Pro smartphone series. [Shipments of Huawei smartphones in China grew 47%](https://www.canalys.com/newsroom/china-smartphone-market-q4-2023) year-over-year during the fourth quarter, according to data from Canalys. Now Huawei is reportedly reprioritizing its chip efforts to [focus on manufacturing AI chips](https://qz.com/huawei-ai-chips-smartphones-chatgpt-1851230105), while slowing production of the chips needed to power the smartphones. “We’ve been through a lot over the past few years,” [Ken Hu, Huawei’s rotating chairman, said in a statement](https://qz.com/huawei-s-profit-more-than-doubles-in-2023-sales-up-9-6-1851373720). “But through one challenge after another, we’ve managed to grow.” [U.S. restrictions on advanced technology shipments to China](https://qz.com/us-is-constantly-assessing-expansion-of-export-controls-1851324480) from U.S. tech companies — [the latest announced in October](https://www.forbes.com/sites/britneynguyen/2023/10/17/biden-administration-limits-chinas-access-to-ai-chips-like-nvidias-to-curb-military-development/) — and [a simmering chip war](https://qz.com/1859534/why-a-taiwanese-chip-maker-is-at-the-heart-of-us-china-tech-fight) have made it hard for Chinese tech companies to source the chips they need for AI production. The hit from U.S. export controls is forcing Huawei to look inward. Almost 70% of the company’s revenue last year came from Chinese consumers, The Journal reported.

173503450 story [](//hardware.slashdot.org/index2.pl?fhfilter=hardware) Posted by [BeauHD](https://twitter.com/BeauHD) on Friday April 12, 2024 @07:40PM from the grand-ambitions dept. [AmiMoJo](/~AmiMoJo) writes: _Huawei Technologies is [building a massive semiconductor equipment research and development center in Shanghai](https://asia.nikkei.com/Business/Tech/Semiconductors/Huawei-building-vast-chip-equipment-R-D-center-in-Shanghai) as the Chinese tech titan continues to beef up its chip supply chain to counter a U.S. crackdown. The centre's mission includes building lithography machines, vital equipment for producing cutting-edge chips. To staff the new center, Huawei is offering salary packages worth up to twice as much as local chipmakers, industry executives and sources briefed on the matter told Nikkei Asia. The company has already hired numerous engineers who have worked with top global chip tool builders like Applied Materials, Lam Research, KLA and ASML, they said, adding that chip industry veterans with more than 15 years of experience at leading chipmakers like TSMC, Intel and Micron are also among recent and potential hires._ The report says Huawei is investing about 12 billion yuan ($1.66 billion) for this R&D chip plant, making it one of Shanghai's top projects for 2024. Working for the company is no easy task, says one chip engineering: "Working with them is brutal. It's not 996 -- meaning working from 9 a.m. to 9 p.m., six days a week. ... It will literally be 007 -- from midnight to midnight, seven days a week. No days off at all. The contract will be for three years, \[but\] the majority of people can't survive till renewal."

American efforts to curb advanced chipmaking in China are working, a top U.S. official said. The chip used in sanctioned Chinese tech company Huawei’s Mate 60 Pro smartphone is [not as advanced as chips being made in the U.S.](https://www.reuters.com/technology/us-commerce-secretary-downplays-chip-advanced-huawei-phone-2024-04-21/), Secretary of Commerce Gina Raimondo said Sunday. “What it tells me is the export controls are working because that chip is not nearly as good, ... it’s years behind what we have in the United States,” Raimondo said in an interview on CBS’s _60 Minutes_. “We have the most sophisticated semiconductors in the world. China doesn’t.” Huawei’s Mate 60 Pro, which was released in August, has a [Kirin 9000s chip that uses advanced 7-nanometer processing technology](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360), and was made by China’s top chipmaker, Semiconductor Manufacturing International Corp. (SMIC). But Bloomberg reported in March Huawei and SMIC [used technology from U.S.-based](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) Applied Materials Inc. and Lam Research Corp. to make the chips. SMIC reportedly had possession of the U.S.-made technology to manufacture the chip before U.S. companies were barred from supplying Chinese companies with advanced chips and chipmaking equipment in October 2022. The Chinese smartphone-maker, which has been on the [U.S. trade blacklist since 2019](https://www.bloomberg.com/news/articles/2019-05-17/u-s-places-huawei-and-67-affiliates-around-world-on-blacklist?sref=P6Q0mxvj), saw a resurgence in China after releasing its Mate 60 Pro series, [partially leading to a decline in Apple’s iPhone sales](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851308057) in the country at the beginning of 2024. Huawei did not immediately respond to a request for comment. Despite being on the U.S. sanctions list, Huawei can still receive advanced chipmaking tools from American companies with a special license to sell to blacklisted Chinese firms. In March, Reuters reported that Advanced Micro Devices (AMD) [tried to stop Intel from selling advanced chips to Huawei](https://qz.com/amd-intel-huawei-ai-chips-1851327701), arguing that its license to do so was unfair because AMD does not have a similar license. “I hold businesses accountable as much as anyone,” Raimondo said of companies continuing to sell chipmaking tools to China. “When I tell them they can’t sell their semiconductors to China, they don’t love that, but I do that.”

Chinese smartphone-maker Huawei reported a rise in profit for the fourth consecutive quarter, outpacing its rival Apple, and showing its resilience against U.S. sanctions. The company reported a net profit of 19.6 billion yuan, or $2.7 million, in the first quarter — [up 564% from the previous year](https://www.bloomberg.com/news/articles/2024-04-30/huawei-profit-surges-564-as-it-eclipses-apple-in-china?sref=P6Q0mxvj). It also reported a 37% rise in sales to 178.8 billion yuan, or $24.7 billion. Meanwhile, Apple’s iPhone sales in China [fell 19%](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851428360) over the same period — its worst performance in the country since the start of the COVID-19 pandemic in 2020. Apple’s share of China’s smartphone market also fell year-over-year in the first quarter of 2024 from 19.7% to 15.7%. Last August, Huawei released its Mate 60 Pro smartphone series. The phone is [powered by the Kirin 9000s chip](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360), which uses an advanced 7-nanometer processor made by top Chinese chipmaker Semiconductor Manufacturing International Corp. (SMIC). Both the smartphone and chip were considered a feat for Huawei. Although it’s been on the [U.S. trade blacklist since 2019](https://www.bloomberg.com/news/articles/2019-05-17/u-s-places-huawei-and-67-affiliates-around-world-on-blacklist?sref=P6Q0mxvj), Huawei saw a resurgence in China after releasing the Mate 60 Pro, with [smartphone sales rising almost 70%](https://www.counterpointresearch.com/insights/china-smartphone-q1-2024/) year-over-year in the first quarter of 2024. Huawei released its newest smartphone, [the Pura 70](https://www.bloomberg.com/news/articles/2024-04-26/huawei-s-new-phone-sports-latest-version-of-made-in-china-chip?sref=P6Q0mxvj), earlier this month. The model is powered by the Kirin 9010 processor — a newer version of the 7-nanometer processor in the Mate 60 Pro. Sanction success? ----------------- Despite Huawei’s successes, United States officials said earlier this month its efforts to curb advanced chipmaking in China are working. Leaders added that the Kirin 9000s chip is not as advanced as the chips currently being manufactured in the U.S. “\[E\]xport controls are working because that chip is not nearly as good... it’s years behind what we have in the United States,” U.S. secretary of commerce Gina Raimondo said in a recent interview on CBS’s 60 Minutes. “We have the most sophisticated semiconductors in the world. China doesn’t.” In March, Bloomberg reported the chip in the successful Mate 60 Pro was made [using technology](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) from United States-based firms Applied Materials Inc. and Lam Research Corp. SMIC reportedly had possession of the technology before U.S. companies were barred from supplying Chinese companies with advanced chips and chipmaking equipment in October 2022. Despite being on the U.S. sanctions list, Huawei can still receive advanced chipmaking tools from American companies who have a special license to sell to blacklisted firms.

The U.S. has revoked licenses that allowed companies including [Intel](https://www.fastcompany.com/90734580/why-intel-wants-congress-to-move-chip-production-back-to-the-u-s) and Qualcomm to ship [chips](https://www.fastcompany.com/91111245/banned-nvidia-ai-chips-end-up-china-embedded-dell-servers) used for laptops and handsets to sanctioned Chinese telecoms equipment maker [Huawei](https://www.fastcompany.com/91091787/huaweis-double-punch-stoking-anticipation-new-smartphone-nipping-apples-marketshare) Technologies, three people familiar with the matter said. A fourth person said some of the companies were notified on Tuesday that their licenses were revoked effective immediately. The U.S. Commerce Department earlier in the day confirmed it had revoked some licenses but stopped short of naming the companies. A spokesperson for Intel declined to comment. Qualcomm did not respond to a request for comment and Huawei did not immediately respond. The move comes after the release last month of Huawei’s first AI-enabled laptop, the MateBook X Pro powered by Intel’s new Core Ultra 9 processor. The laptop launch drew fire from Republican lawmakers, who said it suggested to them that the Commerce Department had given the green light to Intel to sell the chip to Huawei. “We have revoked certain licenses for exports to Huawei,” the Commerce Department said in a statement, declining to specify which ones it had withdrawn. The Commerce Department’s move, first reported by Reuters, comes after concerted pressure by Republican China hawks in Congress who have been urging the Biden administration to take tougher action to thwart Huawei. “This action will bolster U.S. national security, protect American ingenuity, and diminish Communist China’s ability to advance its technology,” Republican Congresswoman Elise Stefanik said in a statement. The move could hurt Huawei which still relies on Intel chips to power its laptops, and could hurt U.S. suppliers that do business with the company. “China resolutely opposes the United States overstretching the concept of national security and abusing export controls to suppress Chinese companies without justification,” the Chinese foreign ministry said in a statement. Intel has also been facing weak demand for its traditional data center and PC chips. Last month, it lost $11 billion in stock market value after forecasting second-quarter revenue and profit below market estimates. Huawei was placed on a U.S. trade restriction list in 2019 amid fears it could spy on Americans, part of a broader effort to handicap China’s ability to bolster its military. Being added to the list means the company’s suppliers have to seek a special, difficult-to-obtain license before shipping. Even so, suppliers to Huawei have received licenses worth billions of dollars to sell Huawei goods and technology, including one particularly controversial authorization, issued by the Trump administration, which has allowed Intel to ship central processors to Huawei for use in its laptops since 2020. Qualcomm has sold older 4G chips to handsets since receiving a license from U.S. officials in 2020. In regulatory filing earlier this month, Qualcomm had said it did not expect to receive more chip revenue from Huawei beyond this year. However, Qualcomm still licenses its portfolio of 5G technologies to Huawei, which last year began using a 5G chip designed by its HiSilicon unit that most analysts believe is manufactured in violation of U.S. sanctions. Qualcomm said in the filing this month that its patent deal with Huawei expires early in Qualcomm’s fiscal 2025 and that it has started negotiations to renew the deal. Critics argue such licenses have contributed to the company’s resurgence. Huawei shocked industry last August with a new phone powered by a sophisticated chip manufactured by Chinese chipmaker SMIC, despite U.S. export restrictions on both companies. The phone helped Huawei smartphone sales spike 64% year on year in the first six weeks of 2024, according to research firm Counterpoint. Its smart car component business has also contributed to Huawei’s resurgence, with the company notching its fastest revenue growth in four years in 2023. _—Alexandra Alper, Fanny Potkin and David Shepardson, Reuters_ _ Recognize your brand’s excellence by applying to this year’s [Brands That Matter Awards](https://www.fastcompany.com/apply/brands-that-matter) before the final deadline, June 7. Sign up for Brands That Matter notifications [here](https://fastcompany.swoogo.com/24btmnotifications/register?ref=article). _

The advanced chips Nvidia developed for its market in China are reportedly not selling well, and it’s forcing the [world’s most valuable chip company](https://qz.com/nvidia-is-on-the-way-to-becoming-the-first-chipmaker-wi-1851281048) to cut prices to compete with homegrown competitors. The H20, the most advanced chip designed to not require an export control license, has weak sales in China, [causing Nvidia to price it below a rival chip from Huawei](https://www.reuters.com/technology/nvidia-cuts-china-prices-huawei-chip-fight-sources-say-2024-05-24/), Reuters reported, citing unnamed sources familiar with the matter. Nvidia released [three artificial intelligence chips](https://www.reuters.com/technology/nvidia-plans-release-three-new-chips-china-local-media-2023-11-09/), including the H20, in the Chinese market late last year after the U.S. tightened controls on selling advanced chips to the country. With an abundant supply of H20 chips, Nvidia has sold some of the chips at a more than 10% discount compared to the Ascend 910B AI chips from Huawei, sources told Reuters. During Nvidia’s first-quarter earnings call Wednesday, the company said it [expects the Chinese market](https://qz.com/nvidia-first-quarter-earnings-blackwell-stock-china-1851496241) “to remain very competitive going forward.” Nvidia’s data center revenue in China “is down significantly from the level prior to the imposition of the new export control restrictions in October.” Nvidia chief executive Jensen Huang said the tight competition in China is due to limitations on the company’s technology. Huawei is preparing to increase shipments of Ascend 910B chips this year, which could pose a threat to Nvidia’s business in China, especially since Huawei’s chip outperforms the H20 in some metrics, sources told Reuters. However, last month, U.S. Secretary of Commerce Gina Raimondo said a different advanced chip used in Huawei’s Mate 60 Pro smartphone [shows U.S. efforts to curb advanced chipmaking in China are working](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501). The Kirin 9000s chip developed by China’s top chipmaker Semiconductor Manufacturing International Corp. (SMIC) “is not nearly as good, ... it’s years behind what we have in the United States,” Raimondo said. “We have the most sophisticated semiconductors in the world. China doesn’t.” Huawei and SMIC reportedly [used technology from U.S.-based companies](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) Applied Materials Inc. and Lam Research Corp. to develop the chips.

One of Apple’s major challengers in the Chinese market is nearing a billion active users amid ongoing U.S. sanctions on its technology. Huawei has [reached 900 million active consumer devices](https://www.bloomberg.com/news/articles/2024-06-21/huawei-mobile-devices-near-a-billion-as-apple-rivalry-heats-up?utm_medium=social&utm_campaign=socialflow-organic&utm_content=business&cmpid=socialflow-twitter-business&utm_source=twitter&embedded-checkout=true&sref=P6Q0mxvj) with the company’s Harmony operating software, said consumer chairman Richard Yu, according to Bloomberg. He added that the company’s premium smartphone sales have risen 72% in the first five months of the year. Since fully releasing its Mate 60 Pro smartphone series in September, Huawei has experienced a [resurgence in China](https://qz.com/huawei-beats-apple-makes-huge-profits-china-sanctions-1851445476). In April, Huawei reported a net profit of 19.6 billion yuan, or $2.7 million, in the first quarter — [up 564% from the previous year](https://www.bloomberg.com/news/articles/2024-04-30/huawei-profit-surges-564-as-it-eclipses-apple-in-china?sref=P6Q0mxvj). It also reported a 37% rise in sales to 178.8 billion yuan, or $24.7 billion. Huawei has put HarmonyOS in other devices, including watches and TVs, over the years, which [helped it overtake Apple’s operating system by Chinese market share](https://www.counterpointresearch.com/insights/global-smartphone-os-market-share/) in the first quarter of this year, according to Counterpoint Research. The Mate 60 Pro is powered by the Kirin 9000s chip, which uses advanced 7-nanometer processing technology. The processor was made by top Chinese chipmaker Semiconductor Manufacturing International Corp. (SMIC). Both the smartphone and chip were considered a feat for Huawei, which has been on the U.S. trade blacklist since 2019. However, U.S. Secretary of Commerce Gina Raimondo said in April that [the chip “is not nearly as good” and “years behind”](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501) advanced chips produced in the U.S. Yu said Huawei will release a successor to the Mate 60 Pro, the Mate 70, at the end of the year, Bloomberg reported. He also said Huawei’s Ascend processors, which the company’s developing as an alternative to advanced chips from firms such as Nvidia, are 1.1 times more effective in training AI models compared to chips made by unspecified competitors.

 U.S. efforts to [curb advanced chipmaking in China](https://qz.com/us-china-taiwan-cold-war-ai-chips-tsmc-semiconductors-1851484430) are taking a toll on one of the country’s top tech companies. Huawei is reportedly [having a hard time increasing production of its Ascend 910B artificial intelligence chip](https://www.theinformation.com/articles/a-new-u-s-crackdown-is-crippling-chinas-best-hope-to-rival-nvidia?rc=5xvgzc) — China’s best alternative to Nvidia’s AI chips, which cannot be sold to Chinese customers under U.S. trade restrictions. The company has faced production problems in the past few weeks, The Information reported, citing unnamed people familiar with the matter. The chip fabrication machines Huawei uses to produce the advanced chips are designed for older generations of chips, and repurposing them is causing certain components to break down. Companies in the U.S. are [restricted from sending equipment for producing advanced chips](https://qz.com/us-china-chip-wars-export-blacklist-rules-1851374558) to Chinese semiconductor factories as part of an effort to curb technological and military advances in the country. The U.S. has reportedly asked allies, including South Korea, to [enforce similar export controls on chips](https://qz.com/south-korea-china-chip-exports-us-1851380981). Huawei has been on the U.S. Department of Commerce’s [trade blacklist since 2019](https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-10616.pdf?utm_campaign=pi%20subscription%20mailing%20list&utm_source=federalregister.gov&utm_medium=email), but has been able to receive advanced chipmaking tools from [U.S. companies with a special license](https://qz.com/amd-intel-huawei-ai-chips-1851327701) to sell to blacklisted Chinese firms. “Huawei is an ongoing threat to our national security,” a U.S. Commerce Department spokesperson said in a statement shared with The Information. “We remain laser-focused on tracking down any instances of attempted evasion or circumvention of our controls.” While Huawei and its main chip manufacturer, Semiconductor Manufacturing International Corp. (SMIC), had estimated they’d soon be able to produce about 500,000 Ascend chips each year, it’s hard to determine which components need to be replaced, and both companies realized they don’t have enough to increase production, people told The Information. The slowed production could impact Chinese companies, including Baidu and Alibaba, which have turned to Huawei’s chips [over ones developed by Nvidia designed to not require an export control license](https://qz.com/nvidia-cut-chip-prices-china-keep-up-huawei-h20-ai-1851498915). Neither Huawei nor SMIC immediately responded to a request for comment. In August, Huawei released its Mate 60 Pro smartphone featuring a SMIC-designed [Kirin 9000s chip using advanced 7-nanometer processing technology](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) — a feat given U.S. sanctions. However, Huawei and SMIC reportedly [used technology from U.S.-based](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) Applied Materials Inc. and Lam Research Corp. to make the chips. U.S. Secretary of Commerce Gina Raimondo later said the [chip is “not nearly as good” and “years behind”](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501) chips made in the U.S.

China’s [artificial intelligence development](https://qz.com/china-top-ai-models-startups-baidu-alibaba-bytedance-1851563639) is being slowed by [U.S. trade restrictions on advanced chips](https://qz.com/us-china-chip-wars-export-blacklist-rules-1851374558) — and the gap between the two countries could “expand,” experts said. Despite strong demand for Nvidia’s H20 chip, which was designed by the U.S.-based chipmaker to [not require an export control license](https://www.reuters.com/technology/nvidia-plans-release-three-new-chips-china-local-media-2023-11-09/), trade restrictions are slowing China’s ability to improve its [large language models, or LLMs](https://qz.com/ai-artificial-intelligence-glossary-vocabulary-terms-1851422473), which power AI technology such as ChatGPT, experts said during a call with Jeffries analysts, according to a note. Therefore, “China’s gap with the US would at least stay, if not expand,” analysts wrote in the note. The H20 chip has lower computing power than Nvidia’s chips sold to U.S. tech companies, and Chinese companies are [turning to Huawei’s Ascend chip](https://qz.com/nvidia-cut-chip-prices-china-keep-up-huawei-h20-ai-1851498915) as a longterm solution, experts said, adding that the support will also help the Chinese tech giant improve its chip. However, experts on the call said they are worried if China has enough capacity for the advanced 7-nanometer process to meet demand in the longterm. Huawei was reportedly [having a hard time increasing production](https://qz.com/huawei-ai-chip-us-sanctions-1851559551) of its Ascend 910B chip — China’s best alternative to Nvidia’s chips, which are not allowed to be sold to Chinese customers — due to [components in repurposed chip fabrication machines breaking down](https://www.theinformation.com/articles/a-new-u-s-crackdown-is-crippling-chinas-best-hope-to-rival-nvidia?rc=5xvgzc). U.S. officials have said a different chip, the Kirin 9000s, which uses advanced 7-nanometer processing technology and powers Huawei’s Mate 60 Pro smartphone released last year, is [not as advanced as chips being developed in the U.S](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501). “What it tells me is the export controls are working because that chip is not nearly as good, ... it’s years behind what we have in the United States,” Secretary of Commerce Gina Raimondo said. “We have the most sophisticated semiconductors in the world. China doesn’t.” However, while the U.S. has recently cut federal research and development across industries, [China has boosted research and development by 10%](https://www.theverge.com/24197237/arati-prabhakar-ostp-director-tech-policy-science-ai-regulation-decoder-podcast), Arati Prabhakar, director of the White House Office of Science and Technology Policy, said in an interview with The Verge this month. As cuts happen during the AI boom, Prabhakar said the U.S. “should be doubling down,” and that it’s “doing the work to get back on track.” Meanwhile, experts said demand for computing power will continue to grow as companies develop larger, more advanced models, and that China’s AI industry will likely have to consolidate since there are “too many players, and both capital and computing power are in short supply.” The shortage could impact China’s competitiveness, experts said. While some experts said Chinese companies should focus on optimizing models to perform on a competitive scale with less computing power, another expert said the early stages of AI model development need the most computing power to experiment, and optimization would only be effective when models are mature.

One of China’s main competitors in the [chip war](https://qz.com/us-china-taiwan-cold-war-ai-chips-tsmc-semiconductors-1851484430) has built a research and development center for chips in Shanghai as it faces pressure from U.S. sanctions aimed at curbing its [advanced technology efforts](https://qz.com/gap-ai-us-china-could-expand-experts-huawei-nvidia-chip-1851592854). The Huawei LianqiuLakeR&D Center is expected to [start operations this year](https://www.shqp.gov.cn/english/news2023/20240716/1179583.html) with a total investment cost of over 10 billion yuan, or $1.4 billion, according to a release from the Qingpu district government. The release added that the research and development center will help the Chinese tech giant “achieve greater breakthroughs in key technological fields such as 5G, cloud computing and artificial intelligence.” In January, the state-owned Securities Times reported that the center will have [nearly 30,000 personnel carrying out research and development](https://www.stcn.com/article/detail/1093860.html) of chips, wireless networks, and the internet. Huawei has been on the [U.S. trade blacklist](https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-10616.pdf?utm_campaign=pi%20subscription%20mailing%20list&utm_source=federalregister.gov&utm_medium=email) since 2019, and special licenses issued to U.S. chipmakers Intel and Qualcomm allowing the companies to sell to [blacklisted Chinese chip firms](https://qz.com/us-china-chip-wars-export-blacklist-rules-1851374558) were [revoked](https://www.bloomberg.com/news/articles/2024-05-07/us-revokes-intel-qualcomm-licenses-to-sell-chips-to-huawei?sref=P6Q0mxvj) in May. However, Huawei has experienced a resurgence in China due to its Mate 60 Pro smartphone, which is powered by a Kirin 9000s chip. The chip, which uses advanced 7-nanometer processing technology — seen as a blow to U.S. sanctions efforts — was made by China’s top chipmaker, Semiconductor Manufacturing International Corp. (SMIC). However, Bloomberg [reported](https://www.bloomberg.com/news/articles/2024-03-08/huawei-chip-breakthrough-used-tech-from-two-us-gear-suppliers?sref=P6Q0mxvj) in March that the companies had [used technology from U.S.-based](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) Applied Materials Inc. and Lam Research Corp. to make the chips. SMIC reportedly had possession of the U.S.-made technology before U.S. companies were barred from supplying Chinese companies with advanced chips and chipmaking equipment in October 2022. In April, U.S. Secretary of Commerce Gina Raimondo said Huawei’s smartphone chip “is not nearly as good” and “years behind what we have in the United States” — a [sign that U.S. export controls are effective](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501). Meanwhile, Huawei reportedly is [having a hard time increasing production](https://qz.com/huawei-ai-chip-us-sanctions-1851559551) of its Ascend 910B chip — China’s best alternative to Nvidia’s chips, which are not allowed to be sold to Chinese customers — due to [components in repurposed chip fabrication machines breaking down](https://www.theinformation.com/articles/a-new-u-s-crackdown-is-crippling-chinas-best-hope-to-rival-nvidia?rc=5xvgzc).

  General Motors’s goal of producing 1 million electric vehicles in North America by the end of next year is mired in doubt after comments from CEO Mary Barra on Monday. [Read More](https://qz.com/gm-electric-vehicle-production-capacity-mary-barra-1851594410)   One of China’s main competitors in the [chip war](https://qz.com/us-china-taiwan-cold-war-ai-chips-tsmc-semiconductors-1851484430) has built a research and development center for chips in Shanghai as it faces pressure from U.S. sanctions aimed at curbing its [advanced technology efforts](https://qz.com/gap-ai-us-china-could-expand-experts-huawei-nvidia-chip-1851592854). [Read More](https://qz.com/huawei-billion-dollar-chip-center-us-sanctions-ai-tech-1851594245)   Tesla is looking to hire more than 800 workers in the U.S. to fill positions in everything from construction and manufacturing to artificial intelligence and robotics, some three months after it initiated a wave of mass layoffs. [Read More](https://qz.com/tesla-hiring-ai-robotics-energy-elon-musk-layoffs-1851594236)    California officials are assuming that there will be millions of EVs on California’s roads [in the 2030s](https://jalopnik.com/california-will-become-the-first-state-to-ban-gasoline-1849451858), so the state needs to get on the ball when it comes to [building chargers](https://jalopnik.com/federal-ev-plan-will-see-as-many-charging-stations-as-g-1851160281). However, [Calmatters](https://calmatters.org/environment/climate-change/2024/07/california-electric-car-chargers-unrealistic-goals/) reports that California lofty EV charging goals don’t seem to have a basis in reality. [Read More](https://qz.com/california-million-ev-chargers-1851595467)  As big tech companies [from Microsoft to Apple](https://qz.com/microsoft-openai-apple-observer-board-seats-antitrust-1851584300) face increasing antitrust scrutiny from the Biden administration, one tech giant is eyeing a major purchase. [Read More](https://qz.com/google-wiz-acquisition-23-billion-cloud-security-1851592280) We may earn a commission from links on this page.

As the [U.S. considers tougher trade restrictions](https://qz.com/biden-weighs-trade-rules-block-chipmaking-exports-china-1851596265) to prevent advanced chip equipment from reaching China, U.S.-based chipmaker Nvidia is reportedly [working on a version of its new artificial intelligence chips](https://www.reuters.com/technology/nvidia-preparing-version-new-flaghip-ai-chip-chinese-market-sources-say-2024-07-22/) to comply with those rules. Nvidia is working on a version of its new [Blackwell AI chips](https://qz.com/nvidia-new-blackwell-ai-chip-1851348043) for the Chinese market, Reuters reported, citing unnamed people familiar with the matter. The chipmaker will reportedly work with a local distribution partner, Inspur, to launch and sell the chip, tentatively called the “B20,” in China. The B20 is expected to start shipping in the second quarter of 2025, a source told Reuters. Nvidia declined to comment. The chipmaker has [three chips](https://www.reuters.com/technology/nvidia-plans-release-three-new-chips-china-local-media-2023-11-09/) designed specifically to comply with U.S. export controls, including the H20, which it [cut prices for amid weak sales](https://qz.com/nvidia-cut-chip-prices-china-keep-up-huawei-h20-ai-1851498915) to compete with chips from homegrown competitor Huawei. However, H20 sales are now growing, sources told Reuters. Nvidia is expected to [sell more than one million of its H20 chips in China this year](https://www.ft.com/content/b76ef55b-21cd-498b-ac16-5660908bb8d2), worth around $12 billion, despite U.S. trade restrictions, the Financial Times reported, citing SemiAnalysis data. Nvidia’s expected sales are almost double Huawei’s sales expectations for its [Ascend 910B chip](https://qz.com/huawei-ai-chip-us-sanctions-1851559551), according to the data. Meanwhile, Nvidia’s H20 chips could be at risk under further U.S. trade rules, Jeffries analysts said. When the U.S. does its annual review of U.S. semiconductor export controls in October, “it is highly likely that” the H20 will be banned for sale to China, Jeffries analysts wrote in a note. The ban could happen three ways: through a “product specific ban, lowering the computing power cap, and/or putting a cap on memory capacity,” analysts wrote. The U.S. could also extend export controls on chips sold to other countries in the region, such as Malaysia, Indonesia, and Thailand, or extend the controls to overseas Chinese companies, although this would be harder to implement, according to analysts.

Apple’s [AAPL](https://qz.com/quote/AAPL) main competition in China has over 3 million preorders for its smartphone as the iPhone maker prepares to unveil its latest model. Huawei’s tri-fold Mate XT smartphone has [received over 3.18 million preorders](https://www.vmall.com/product/comdetail/index.html?prdId=10086499369393&sbomCode=2601010506008) since September 7, according to its website. The Mate XT will be [unveiled at an event](https://www.huawei.com/en/executives/board-of-directors/yu-chengdong) on Tuesday, Richard Yu, Huawei executive director, said on Weibo. Meanwhile, Apple is expected to [introduce its new iPhone 16](https://qz.com/apple-iphone-16-event-artificial-intelligence-ios18-1851641798?utm_source=quartz_newsletter_breaking&utm_medium=email&utm_campaign=2024-09-09_breaking) on Monday, equipped with its new [generative artificial intelligence initiative](https://qz.com/apple-intelligence-ios18-can-apple-beat-rivals-ai-1851533504), Apple Intelligence, that includes an AI-powered update to Siri and other native iPhone apps. Since [releasing its Mate 60 Pro smartphone series](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) last August, Huawei has outpaced Apple in the Chinese market. In April, the company reported a [rise in profit](https://qz.com/huawei-beats-apple-makes-huge-profits-china-sanctions-1851445476) for the fourth consecutive quarter, also showing [resilience against U.S. sanctions](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501). Meanwhile, Apple’s [iPhone sales fell 19%](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851428360) over the same period — its worst performance in China since the start of the COVID-19 pandemic in 2020. Apple’s share of China’s smartphone market also fell year-over-year in the first quarter of 2024 from 19.7% to 15.7%. The company has had to [cut prices on some iPhone models](https://qz.com/apple-iphone-discounts-price-cuts-sales-china-tim-cook-1851487691) in the Chinese market as competition grows with Huawei and other homegrown smartphone-makers. China’s [smartphone shipments increased 8.9%](https://www.idc.com/getdoc.jsp?containerId=prAP52467524) year-over-year in the second quarter of this year, led by double-digit growth from local companies including Huawei, Vivo, and Xiaomi, according to the International Data Corporation. The growth edged Apple out of the top five into sixth place — and, despite the price cuts, the iPhone-maker saw a decline of 3.1% year-over-year, the data shows.

As it races Apple ([AAPL](https://qz.com/quote/AAPL)) in the Chinese smartphone market, Huawei debuted its new smartphone hours after the iPhone maker unveiled its latest model. Huawei launched its 10.2-inch, trifold Mate XT smartphone on Tuesday in Shenzhen, China, hours after [Apple introduced the iPhone 16](https://qz.com/apple-iphone-16-ai-watch-airpod-1851643112). “Today we bring you a product that everyone can think of but could not make,” Richard Yu, Huawei executive director, said at the launch, [according to](https://qz.com/huawei-trifold-phone-preorders-china-apple-iphone-16-1851643088) Reuters. “Our team has been working hard for five years and has never given up. Today we will once again rewrite the history of the industry, turn science fiction into reality, and lead a new era of folding devices.” The Mate XT starts at 19,999 yuan, or $2,800, and has [around 4.5 million pre-orders](https://www.vmall.com/product/comdetail/index.html?prdId=10086499369393&sbomCode=2601010506008), according to the Chinese smartphone-maker. Pre-orders started on September 7, and do not require a deposit. Yu said the new smartphone, which uses the company’s Kylin chip, features an AI-powered assistant for text summarization, translation, and editing, according to Reuters. Meanwhile, Apple unveiled the new iPhone 16 series, as well as upgrades to its Apple Watches and AirPods, on Monday. The iPhone maker demonstrated its new AI features, [dubbed Apple Intelligence](https://qz.com/apple-intelligence-ios18-can-apple-beat-rivals-ai-1851533504), which will power native apps such as Safari and Notes, as well as Apple’s voice assistant, Siri. The AI features will be rolled out in phases, with early features being made available through a software update in beta in October for iPhone 15 Pro models and newer. The update will be available on iOS 18, iPad OS 18, and macOS Sequoia. Since [releasing its Mate 60 Pro smartphone series](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) last August, Huawei has outpaced Apple in the Chinese market. In April, the company reported a [rise in profit](https://qz.com/huawei-beats-apple-makes-huge-profits-china-sanctions-1851445476) for the fourth consecutive quarter, also showing [resilience against U.S. sanctions](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501). Meanwhile, Apple’s [iPhone sales fell 19%](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851428360) over the same period — its worst performance in China since the start of the COVID-19 pandemic in 2020. Apple’s share of China’s smartphone market also fell year-over-year in the first quarter of 2024 from 19.7% to 15.7%. The company has had to [cut prices on some iPhone models](https://qz.com/apple-iphone-discounts-price-cuts-sales-china-tim-cook-1851487691) in the Chinese market as competition grows with Huawei and other homegrown smartphone-makers.

Huawei is preparing to release its new ‘trifold’ smartphone on Friday — the same day as Apple’s ([AAPL](https://qz.com/quote/AAPL)) latest iPhone comes out — but it’s already being listed in China for up to three times its price. The Chinese tech giant’s new Mate XT smartphone starts at 19,999 yuan, or $2,800, but scalpers are listing the smartphone on resale sites for between 60,000 and 70,000 yuan, or about $8,500 to $9,900, amid high demand, Lin Shen, a second-hand smartphone dealer, told the South China Morning Post ([BABA](https://qz.com/quote/BABA)). “The prices at Huaqiangbei \[, a Shenzhen-based electronics wholesale marketplace,\] are still very unstable,” Lin told the SCMP. “Most of the interest is from scalpers who are looking to resell \[the Mate XT\] and make a profit from the price difference.” Huawei did not immediately respond to a request for comment. Huawei’s trifold smartphone received [over 3 million preorders](https://qz.com/huawei-trifold-phone-preorders-china-apple-iphone-16-1851643088) before its debut [just hours after](https://qz.com/huawei-mate-xt-trifold-smartphone-apple-iphone-16-ai-1851644416?_gl=1*1n3u90k*_ga*MjMyMTcyODYuMTcwNzE2NTQ5Mg..*_ga_V4QNJTT5L0*MTcyNjc1MDk4Mi4xOTIuMS4xNzI2NzUxNzIzLjYwLjAuMA..) Apple’s iPhone 16 unveiling. Pre-orders for the smartphone started on September 7, and did not require a deposit. And as Apple [touted artificial intelligence features](https://qz.com/apple-iphone-16-ai-watch-airpod-1851643112) for its upcoming iPhone models, Huawei said its Mate XT, which uses the company’s Kylin chip, [features an AI-powered](https://www.reuters.com/technology/huawei-teases-tri-fold-smartphone-raising-competition-with-apple-china-2024-09-10/) assistant for text summarization, translation, and editing. Apple analyst Ming-Chi Kuo wrote in [a note](https://medium.com/@mingchikuo/survey-and-analysis-of-huaweis-tri-fold-phone-mate-xt-shipment-estimates-raised-but-whether-f8b2f60ab292) that a recent supply chain survey shows 2024 shipments for the tri-fold smartphone have been revised up to 1 million units from 500,000, but noted previous instances of a drop in demand for Huawei’s flagship products after release. Since [releasing its Mate 60 Pro smartphone series](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) last August, Huawei has outpaced Apple in the Chinese smartphone market. In April, the company reported a [rise in profit](https://qz.com/huawei-beats-apple-makes-huge-profits-china-sanctions-1851445476) for the fourth consecutive quarter, also showing [resilience against U.S. sanctions](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501) aimed at curbing China’s advanced chip efforts. Meanwhile, Apple’s [iPhone sales fell 19%](https://qz.com/apple-iphone-sales-china-huawei-vivo-1851428360) over the same period — its worst performance in China since the start of the COVID-19 pandemic in 2020. Apple’s share of China’s smartphone market also fell year-over-year in the first quarter of 2024 from 19.7% to 15.7%. The company has had to [cut prices on some iPhone models](https://qz.com/apple-iphone-discounts-price-cuts-sales-china-tim-cook-1851487691) in the Chinese market as competition grows with Huawei and other homegrown smartphone-makers. Meanwhile, Chinese online retailers are [cutting prices of the iPhone 16](https://www.scmp.com/tech/big-tech/article/3278855/apples-iphone-16-already-selling-discount-china-ai-delay-cools-demand?module=inline&pgtype=article) ahead of its official release in the country, as they wait for Apple’s AI features to roll out, the SCMP reported.

As the U.S. [escalates export controls](https://qz.com/us-release-export-controls-chips-ai-quantum-computing-1851641981?_gl=1*61wcgc*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w) on China, TikTok’s owner is reportedly planning to use a homegrown chipmaker for an artificial intelligence model it’s developing. ByteDance is planning to [build an AI model using chips from Huawei](https://www.reuters.com/technology/artificial-intelligence/bytedance-plans-new-ai-model-trained-with-huawei-chips-sources-say-2024-09-30/), Reuters reported, citing three unnamed people familiar with the matter. The company wants to use Huawei’s Ascend 910B chips to [train](https://qz.com/ai-artificial-intelligence-glossary-vocabulary-terms-1851422473/slides/9?_gl=1*61wcgc*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w) the model, the people said. ByteDance has reportedly ordered over 100,000 of Huawei’s chips, but, as of July, has received less than 30,000 of them. One person told Reuters the model under development is expected to be less powerful than ByteDance’s [Doubao model](https://qz.com/china-top-ai-models-startups-baidu-alibaba-bytedance-1851563639/slides/4?_gl=1*61wcgc*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w), which was released last August. “The entire premise here is wrong,” a spokesperson for ByteDance said in a statement shared with Quartz. “No new AI model is being developed.” Huawei did not immediately respond to a request for comment. The company’s Ascend 910B chip is used for less intense AI model [inferencing](https://qz.com/ai-artificial-intelligence-glossary-vocabulary-terms-1851422473/slides/10), people told Reuters, but training requires more compute power, and therefore, more advanced chips. And Huawei was reportedly having a [hard time increasing production](https://qz.com/huawei-ai-chip-us-sanctions-1851559551?_gl=1*vlw2qe*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w) of the Ascend 910B — China’s best alternative to Nvidia’s ([NVDA](https://qz.com/quote/NVDA)) chips that cannot be sold to Chinese customers under U.S. trade restrictions. The chip fabrication machines Huawei uses to produce the advanced chips are designed for older generations of chips, The Information [reported](https://www.theinformation.com/articles/a-new-u-s-crackdown-is-crippling-chinas-best-hope-to-rival-nvidia?rc=5xvgzc), and repurposing them was causing certain components to break down. Since the U.S. began [implementing trade restrictions](https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file) on advanced chips, including those designed by Nvidia, in 2022, ByteDance has sought chips from Chinese companies, and [worked on](https://qz.com/tiktok-owner-bytedance-reportedly-design-ai-chips-tsmc-1851649056?_gl=1*aj54z*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w) [developing its own](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501?utm_source=dlvr.it&utm_medium=twitter&_gl=1*10sgmpm*_ga*MjMyMTcyODYuMTcwNzE2NTQ5Mg..*_ga_V4QNJTT5L0*MTcyNzcwNjc5Ny4yMTEuMS4xNzI3NzA4MDM5LjYwLjAuMA..). ByteDance has [designed two chips](https://qz.com/tiktok-owner-bytedance-reportedly-design-ai-chips-tsmc-1851649056) with Taiwan Semiconductor Manufacturing Company ([TSM](https://qz.com/quote/TSM)) that it plans to mass produce by 2026, The Information [reported](https://www.theinformation.com/articles/bytedance-steps-up-ai-chip-efforts?rc=5xvgzc). The Chinese government, meanwhile, is encouraging tech companies to [buy AI chips from local companies](https://www.bloomberg.com/news/articles/2024-09-27/china-urges-local-companies-to-stay-away-from-nvidia-s-ai-chips?sref=P6Q0mxvj), and become less dependent on Nvidia, Bloomberg reported. Nvidia has developed three AI chips for the Chinese market in compliance with export controls, including the H20, which ByteDance has [ordered hundreds of thousands of](https://qz.com/tiktok-owner-bytedance-reportedly-design-ai-chips-tsmc-1851649056?_gl=1*s310k9*_ga*MTIwNzMxNDYwMS4xNzE2MTMzMDkz*_ga_V4QNJTT5L0*MTcyNzcxMDQ1MC40Ny4xLjE3Mjc3MTA1MDAuMTAuMC4w).

"China Telecom, one of the largest wireless carriers in mainland China, says that it has developed two large language models (LLMs) relying solely on domestically manufactured AI chips..." [reports _Tom's Hardware_](https://www.tomshardware.com/tech-industry/artificial-intelligence/state-owned-china-telecom-has-trained-domestic-ai-llms-using-homegrown-chips-one-model-reportedly-uses-1-trillion-parameters). "If the information is accurate, this is a crucial milestone in China's attempt at becoming independent of other countries for its semiconductor needs, especially as the U.S. is increasingly tightening and banning the supply of the latest, highest-end chips for Beijing in the U.S.-China chip war." _Huawei, which has mostly been banned from the U.S. and other allied countries, is one of the leaders in China's local chip industry... If China Telecom's LLMs were indeed fully trained using Huawei chips alone, then this would be a massive success for Huawei and the Chinese government._ The project's [GitHub page](https://github.com/Tele-AI/TeleChat2) "contains a hint about how China Telecom may have trained the model," [reports the Register](https://www.theregister.com/2024/10/02/china_telecom_model_trained_local_tech/), "in a mention of compatibility with the 'Ascend Atlas 800T A2 training server' — a Huawei product [listed](https://support.huawei.com/enterprise/en/doc/EDOC1100349801/cd591fd8/technical-specifications#EN-US_TOPIC_0000001530341030) as supporting the Kunpeng 920 7265 or Kunpeng 920 5250 processors, respectively running 64 cores at 3.0GHz and 48 cores at 2.6GHz. Huawei builds those processors using the Arm 8.2 architecture and [bills](https://www.hisilicon.com/en/products/Kunpeng/Huawei-Kunpeng/Huawei-Kunpeng-920) them as produced with a 7nm process." The _South China Morning Post_ says the unnamed model [has 1 trillion parameters](https://www.scmp.com/tech/big-tech/article/3280588/china-telecom-say-ai-model-1-trillion-parameters-trained-chinese-chips?module=perpetual_scroll_0), according to China Telecom, while the TeleChat2t-115B model has over 100 billion parameters. _Thanks to long-time Slashdot reader [hackingbear](/~hackingbear) for sharing the news._

An advanced chip manufactured by Taiwan Semiconductor Manufacturing Company was reportedly found in sanctioned Chinese tech giant Huawei’s latest artificial intelligence chips. Research firm TechInsights took apart Huawei’s cutting-edge AI accelerator and found an Ascend 910B chip made by TSMC ([TSM\-1.70%](https://qz.com/quote/TSM)), [Reuters](https://www.reuters.com/technology/tsmc-told-us-chip-huawei-device-after-techinsights-finding-source-says-2024-10-22/) and [Bloomberg](https://www.bloomberg.com/news/articles/2024-10-22/huawei-technologies-latest-ai-processors-were-made-by-tsmc?srnd=phx-technology&sref=P6Q0mxvj) reported, citing unnamed people familiar with the matter. The Canadian research firm told TSMC about its findings, prompting the Taiwanese chipmaker to inform the U.S. government about Huawei’s possible violation of U.S. export controls, Reuters reported. The Chinese tech company said it hasn’t “produced any chips via TSMC after the implementation of the amendments made by the US Department of Commerce to its FDPR that target Huawei in 2020,” in a statement shared with Bloomberg. The rule [does not allow the export of any good to any country](https://qz.com/us-china-taiwan-cold-war-ai-chips-tsmc-semiconductors-1851484430) if it is manufactured with a certain percentage of U.S. intellectual property components. Huawei added that it “has never launched the 910B chip.” TSMC also informed the U.S. government about a [potential attempt by Huawei to have it make AI chips](https://www.ft.com/content/af6e1958-c9df-463a-a2b6-4bf2e5b69178) for the company, the Financial Times reported. The Taiwanese chipmaker said in a statement shared with Quartz that it “proactively communicated with the U.S. commerce department regarding” a report by The Information last week that it was [under investigation](https://www.theinformation.com/articles/u-s-probes-tsmcs-dealings-with-huawei?rc=5xvgzc) for making AI or smartphone chips for Huawei, which would be a violation of U.S. export controls. “We are not aware of TSMC being the subject of any investigation at this time,” TSMC said in the statement, adding that it “is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls.” The chipmaker said it has not supplied chips to Huawei “since mid-September 2020.” “If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties including customers and regulatory authorities,” TSMC said in the statement. Neither Huawei nor the Department of Commerce responded to a request for comment from Quartz. TSMC informed the Commerce Department about a customer placing orders for a chip resembling the Ascend 910B processor developed by Huawei, the Financial Times reported, citing unnamed people familiar with the matter. After seeing the order, a person close to TSMC told the Financial Times that the company also spoke to the customer related to the order, and that any investigation would be “related to” the Taiwanese chipmaker, but that it wouldn’t be the focus. The chipmaker reportedly made the precursor to Huawei’s chip before [U.S. sanctions](https://sanctionssearch.ofac.treas.gov/Details.aspx?id=30947) were placed on the Chinese tech company. A Commerce Department spokesperson told the Financial Times that its Bureau of Industry and Security is aware of The Information’s report, and that it “cannot comment on whether any investigation is ongoing.” Officials from the BIS met with TSMC leaders earlier this month about issues with its supply chain, Bloomberg reported, including over if third-party distributors could allow China access to restricted technology. TSMC’s U.S.-listed shares were down around 1.5% during mid-day trading on Tuesday. _This story has been updated with additional information and a statement from TSMC._

An anonymous reader shared [this report from the Washington Post](https://www.stripes.com/theaters/asia_pacific/2024-11-01/china-huawei-ai-chip-export-control-failure-15703671.html): _A few weeks ago, analysts at a specialized technological lab put a microchip from China under a powerful microscope. Something didn't look right... The microscopic proof was there that a chunk of the electronic components from Chinese high-tech champion Huawei Technologies had been produced by the world's most advanced chipmaker, Taiwan Semiconductor Manufacturing Company. That was a problem because two U.S. administrations in succession had taken actions to assure that didn't happen. The news of the breach of U.S. export controls, first reported in October by the tech news site [the Information](https://www.theinformation.com/articles/u-s-probes-tsmcs-dealings-with-huawei), has sent a wave of concern through Washington... The chips were routed to Huawei through Sophgo Technologies, the AI venture of a Chinese cryptocurrency billionaire, according to two people familiar with the matter, speaking on the condition of anonymity to discuss a sensitive topic... "It raises some fundamental questions about how well we can actually enforce these rules," said Emily Kilcrease, a senior fellow at the Center for a New American Security in Washington... Taiwan's Ministry of Economic Affairs confirmed that TSMC recently halted shipments to a "certain customer" and notified the United States after suspecting that customer might have directed its products to Huawei... There's been much intrigue in recent days in the industry over how the crypto billionaire's TSMC-made chips reportedly ended up at Huawei. Critics accuse Sophgo of working to help Huawei evade the export controls, but it is also possible that they were sold through an intermediary, which would align with Sophgo's denial of having any business relationship with Huawei... While export controls are often hard to enforce, semiconductors are especially hard to manage due to the large and open nature of the global chip trade. Since the Biden administration implemented sweeping controls in 2022, there have been reports of widespread chip smuggling and semiconductor black markets allowing Chinese companies to access necessary chips... Paul Triolo, technology policy lead at Albright Stonebridge Group, said companies were trying to figure out what lengths they had to go to for due diligence: "The guidelines are murky." _

[AMAT\-0.83%](https://qz.com/quote/AMAT)[LRCX\-0.80%](https://qz.com/quote/LRCX)[ASML\-0.52%](https://qz.com/quote/ASML) As the U.S. continues to strengthen restrictions on advanced technology in China, U.S.-based chip equipment manufacturers are reportedly telling suppliers to find alternatives to Chinese-made components. Chip equipment makers, including California-based Applied Materials ([AMAT\-0.83%](https://qz.com/quote/AMAT)) and Lam Research ([LRCX\-0.80%](https://qz.com/quote/LRCX)), have told suppliers they [worry risking their vendor status](https://www.wsj.com/tech/u-s-chip-toolmakers-move-to-cut-china-from-supply-chains-6ad44c98?mod=tech_lead_story) for using certain components supplied by China, the Wall Street Journal reported, citing unnamed people familiar with the matter. The companies have also told suppliers not to have Chinese investors or shareholders, people told the Journal. Both companies verbally told suppliers to find alternatives, but did not communicate so through official guidelines or agreements, the Journal reported. Finding alternatives to China could raise costs, industry executives told the Journal, because prices would likely be incomparable. Applied Materials told the Journal it looks for alternative suppliers to ensure components are available. “Lam Research diligently adheres to U.S export controls, which also apply to the companies in the supply chain that support chip manufacturing,” a spokesperson for Lam Research said in a statement shared with Quartz. “To facilitate compliance with these rules, and strengthen the resilience of our global supply network, Lam routinely shares information with our suppliers to promote their awareness of and compliance with current and updated trade restrictions.” Applied Materials did not respond to a request for comment from Quartz. Earlier this year, sources [told](https://www.bloomberg.com/news/articles/2024-03-08/huawei-chip-breakthrough-used-tech-from-two-us-gear-suppliers?sref=P6Q0mxvj) Bloomberg that Chinese tech giant Huawei and its chipmaking partner Semiconductor Manufacturing International Corp. [used tech](https://qz.com/china-huawei-us-tech-advanced-chip-1851319496) from Applied Materials and Lam Research to make its advanced 7-nanometer chip for the Mate 60 Pro smartphone. SMIC was already in possession of the U.S. tech before the U.S. Department of Commerce [barred U.S. companies from supplying Chinese companies with advanced chips and chipmaking equipment](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360) in October 2022, sources told Bloomberg. In October, the head of Dutch chipmaking equipment company ASML ([ASML\-0.52%](https://qz.com/quote/ASML)) said he [expects more pressure](https://qz.com/us-pressure-allies-restrict-chip-sales-ai-china-asml-1851678144) on U.S. allies to curb chip sales to China. Christophe Fouquet, chief executive of ASML, [said](https://www.bloomberg.com/news/articles/2024-10-22/asml-chief-sees-us-pressure-building-for-more-china-restrictions?srnd=homepage-americas&sref=P6Q0mxvj) most of its business in China is focused “on mainstream semiconductors,” which “is very different from AI,” during the Bloomberg Tech Summit. Existing U.S. restrictions on China are holding it “10 to 15 years behind when it comes to advanced technology,” Fouquet said. Late last month, the U.S. finalized [restrictions on investments in sensitive technologies in China](https://www.whitehouse.gov/briefing-room/statements-releases/2024/10/28/fact-sheet-addressing-u-s-investments-in-certain-national-security-technologies-and-products-in-countries-of-concern/') by U.S. individuals and companies. The rules cover three categories of technology: semiconductors, quantum computing, and artificial intelligence. Some investments are banned, while others require notice to the U.S. government. _This story has been updated to include a statement from Lam Research._

 [NVDA+4.84%](https://qz.com/quote/NVDA)[ASML\-0.39%](https://qz.com/quote/ASML)[TSM+1.13%](https://qz.com/quote/TSM)[AAPL+0.11%](https://qz.com/quote/AAPL) China’s answer to being [banned](https://sanctionssearch.ofac.treas.gov/Details.aspx?id=30947) from Nvidia’s ([NVDA+4.84%](https://qz.com/quote/NVDA)) artificial intelligence chips is reportedly being stalled by U.S. trade restrictions. Huawei’s next two Ascend processors are being designed with the 7-nanometer process that has existed for years, Bloomberg [reported](https://www.bloomberg.com/news/articles/2024-11-19/china-s-chip-advances-stall-as-us-curbs-hit-huawei-ai-product?srnd=homepage-americas&sref=P6Q0mxvj), citing unnamed people familiar with the matter. The hampered efforts are reportedly due U.S.-led export controls that don’t allow Huawei’s Chinese chipmaking partners to get extreme ultraviolet lithography machines from the Netherlands-based ASML ([ASML\-0.39%](https://qz.com/quote/ASML)). The snag means Huawei’s technology for its advanced chips will be years behind until at least 2026, and advanced processors for its Mate 60 smartphones will also be held back, people told Bloomberg. For comparison, Taiwan Semiconductor Manufacturing Company ([TSM+1.13%](https://qz.com/quote/TSM)), the manufacturing partner to Nvidia and Apple ([AAPL+0.11%](https://qz.com/quote/AAPL)), has said it [expects volume production of 2-nanometer chips](https://www.tsmc.com/english/dedicatedFoundry/technology/logic/l_2nm) in 2025 — three generations ahead of Huawei. To add to the pain, Huawei’s main Chinese chipmaking partner, Semiconductor Manufacturing International Corp., is reportedly having issues producing steady yields — or the amount of functional chips it can produce per manufacturing process — of 7-nanometer chips. One person told Bloomberg that Huawei may not have enough chips for AI and smartphones in the next few years. Meanwhile, TSMC reportedly told its Chinese customers earlier this month that it is [no longer manufacturing AI chips with the advanced 7 nanometer process](https://qz.com/tsmc-cutting-chinese-tech-firms-off-advanced-ai-chip-1851693044). If TSMC does produce the advanced chips for Chinese firms in the future, the U.S. government would likely be involved in an approval process, the Financial Times [reported](https://www.ft.com/content/a736beeb-b38a-484e-bbe9-98e92ecb66d9). The Taiwanese chipmaker’s new rules come as it faces an investigation into how its advanced chip technology [ended up in a cutting-edge AI accelerator](https://qz.com/tsmc-told-us-government-huawei-export-controls-ai-chips-1851678301?_gl=1*1r61ugc*_ga*MzUxNzY2NjAwLjE3MjAwMTcyMjA.*_ga_V4QNJTT5L0*MTczMTA3OTY0MC44Mi4xLjE3MzEwODA2NTUuMjAuMC4w) from the sanctioned Huawei. Canadian research firm TechInsights took apart Huawei’s chip and reportedly found the TSMC-made tech. Our free, fast, and fun briefing on the global economy, delivered every weekday morning.

Last year, the tech giant Huawei catapulted to the top of the smartphone market in China when it released the [Mate 60 Pro](https://www.nytimes.com/2023/09/06/business/economy/huawei-phone-us-china-raimondo.html), a phone that contained a tiny computer chip more advanced than any previously made by a Chinese company. The chips used by Huawei’s smartphones have become a symbol in the struggle between China and the United States for control over advanced technology. Policymakers in Washington have spent years trying to prevent Chinese companies from being able to make the kind of chip Huawei uses in its Mate phone. But Huawei has pressed ahead, and the phone has burnished its image as a national leader, triumphant in the face of U.S. restrictions. Shoppers in China were excited to buy a phone with state-of-the-art components that had been made entirely at home. Huawei was able to appeal to Chinese customers who previously would have been more likely to buy iPhones, eating into [Apple’s most important market](https://www.nytimes.com/2024/03/25/business/china-apple-iphones.html) outside the United States. On Tuesday, Huawei unveiled the next generation of that phone, the Mate 70 series, from its offices in Shenzhen in southeastern China. Richard Yu, Huawei’s consumer group chairman, called the flagship device the “smartest” Mate phone. Powered by its homegrown operating system, HarmonyOS Next, which was officially launched last month, the Mate 70 series has artificial intelligence-enabled functions, including improved photography, live transcription and translation of phone calls. Apple has yet to release its A.I. features in China. Thank you for your patience while we verify access. If you are in Reader mode please exit and [log into](https://myaccount.nytimes.com/auth/login?response_type=cookie&client_id=vi&redirect_uri=https%3A%2F%2Fwww.nytimes.com%2F2024%2F11%2F26%2Fbusiness%2Fchina-huawei-mate-70.html&asset=opttrunc) your Times account, or [subscribe](https://www.nytimes.com/subscription?campaignId=89WYR&redirect_uri=https%3A%2F%2Fwww.nytimes.com%2F2024%2F11%2F26%2Fbusiness%2Fchina-huawei-mate-70.html) for all of The Times. Thank you for your patience while we verify access. Already a subscriber? [Log in](https://myaccount.nytimes.com/auth/login?response_type=cookie&client_id=vi&redirect_uri=https%3A%2F%2Fwww.nytimes.com%2F2024%2F11%2F26%2Fbusiness%2Fchina-huawei-mate-70.html&asset=opttrunc). Want all of The Times? [Subscribe](https://www.nytimes.com/subscription?campaignId=89WYR&redirect_uri=https%3A%2F%2Fwww.nytimes.com%2F2024%2F11%2F26%2Fbusiness%2Fchina-huawei-mate-70.html).

[Will Knight](https://www.wired.com/author/will-knight/) [Louise Matsakis](https://www.wired.com/author/louise-matsakis/) Nov 27, 2024 5:50 PM The new limits, which are expected to be announced Monday, are intended to slow China's ability to build large and powerful AI models.  People are seen inside a Huawei store at the Wangfujing shopping area in Beijing on November 26, 2024, shortly after Huawei's new Mate 70 mobile phone was launched.Photograph: ADEK BERRY/Getty Images The Biden administration is expected to announce a sweeping set of measures on Monday designed to further restrain China’s ability to develop advanced [artificial intelligence](https://www.wired.com/tag/artificial-intelligence/), people familiar with the matter told WIRED. The controls could include sanctioning dozens of Chinese companies that produce equipment for making semiconductors, as well as placing restrictions on a handful of chip manufacturing plants, some of which have ties to the Chinese tech giant Huawei. The US Department of Commerce has also discussed including controls on the sale of high-bandwidth memory, or HBM, an advanced kind of 3D-stacked computer memory component that is often used in high-performance GPUs and customized AI chips. Bloomberg previously reported that the Biden administration [was considering](https://www.bloomberg.com/news/articles/2024-07-31/us-weighs-new-restrictions-on-china-s-access-to-ai-memory-chips) clamping down on China’s access to HBM chips. In total, the Biden administration could end up adding around 200 Chinese firms to an entity list maintained by the Bureau of Industry and Security—an agency within the Commerce department—which would require other companies to acquire special licenses to supply them with software or products from the United States. The US government has been discussing the new measures with its allies and representatives from the semiconductor industry for months, and the exact details of what will be announced on Monday were still in flux as of earlier this week. A spokesperson for the Commerce department declined to comment. Huawei did not immediately return a request for comment. Reuters reported on Friday that the US Chamber of Commerce, a powerful advocacy group for American businesses, [warned its members](https://www.reuters.com/technology/chamber-commerce-sees-new-us-export-crackdown-china-email-says-2024-11-22/) in an email last week that a new round of export controls targeting China would be arriving “prior to the Thanksgiving break," though that timing now appears to have been pushed back by a few days. “China is firmly opposed to the US overstretching the concept of national security, abusing export control measures and making malicious attempts to block and suppress China,” Mao Ning, a spokesperson for China’s foreign ministry, said at a regularly scheduled [press conference](https://www.fmprc.gov.cn/eng/xw/fyrbt/lxjzh/202411/t20241125_11532689.html) earlier this week in response to the anticipated controls. The limits on China’s access to the high-bandwidth memory seem aimed at slowing the country’s efforts to develop domestic chips capable of training very large and powerful AI models. The new restrictions are expected to block access to HMB3, one of the people told WIRED, the latest and most advanced version of the technology, and impose some limits on access to the previous generation, known as HMB2. The US government has been imposing similar export controls on China aimed at limiting its ability to mint advanced silicon for years, but the controls apparently didn’t stop Huawei from developing competitive chips for training large AI models. The Chinese tech giant, which was temporarily crippled by US sanctions half a decade ago, [sent samples](https://www.scmp.com/tech/big-tech/article/3280306/huaweis-ai-chips-take-another-step-forward-chinese-firms-look-nvidia-alternatives) of its latest AI training chip, called Ascend, to customers this September, according to The South China Morning Post. Companies testing Ascend reportedly include ByteDance, the Chinese parent of TikTok, which is [said to be training](https://www.reuters.com/technology/artificial-intelligence/bytedance-plans-new-ai-model-trained-with-huawei-chips-sources-say-2024-09-30/) a large model primarily using Ascend. Baidu, which makes China’s leading search engine and has developed autonomous driving systems, recently [placed an order for Huawei’s chips](http://reuters.com/technology/baidu-placed-ai-chip-order-huawei-shift-away-nvidia-sources-2023-11-07/) in a shift away from US chip giant Nvidia, according to Reuters. (Nvidia declined to comment.) Export restrictions aimed at curbing China’s AI sector began under the first Trump administration. In 2019, several up-and-coming Chinese AI firms were [added to the](https://www.wired.com/story/trumps-salvo-against-china-targets-ai-firms/) entity list, meaning that US firms, including chipmakers like Nvidia, would be required to get a special license to do business with them. This was followed by restrictions on sales of chips made with US technology to Huawei, China’s dominant telco and a leading smartphone manufacturer. The Biden administration ratcheted up the controls in October 2022, [limiting exports to China of cutting-edge GPU chips](https://www.wired.com/story/us-chip-sanctions-kneecap-chinas-tech-industry/), including those made by Nvidia, a move aimed at curbing any Chinese company’s ability to train the most powerful AI models. The rules [were tightened](https://www.wired.com/story/the-us-just-escalated-its-ai-chip-war-with-china/) a year later to close loopholes that still allowed Chinese firms to access some advanced chips. It can be tricky to gauge the impact of US chip sanctions, and some experts question whether the controls are spurring China to make more rapid advances in chipmaking itself, reducing its reliance on American companies. In late 2023, Huawei [unveiled the Mate 60](https://www.scmp.com/tech/big-tech/article/3233166/while-under-us-sanctions-where-did-huawei-get-advanced-chips-its-latest-mate-60-pro-smartphone?utm_medium=Social&utm_source=Twitter#Echobox=1693623447-1), a smartphone featuring an advanced chip from the Chinese chipmaker SMIC. The announcement caused a stir in Washington, because it suggested that SMIC had made substantial progress in advancing its own manufacturing techniques. (Further analysis indicated that Huawei and SMIC were still reliant on [foreign suppliers](https://www.bloomberg.com/news/articles/2024-03-08/huawei-chip-breakthrough-used-tech-from-two-us-gear-suppliers).) But a [report published](https://www.csis.org/analysis/true-impact-allied-export-controls-us-and-chinese-semiconductor-manufacturing-equipment) this week by the Center for Strategic and International Studies, a Washington, DC-based think tank, argued that the Chinese government had already begun ramping up investment in domestic chipmaking before the US government began clamping down on the country’s access to advanced semiconductors. It also noted that China has made bigger strides in sectors not subject to export controls, such as solar cell and electric vehicle manufacturing.

[AAPL\-0.58%](https://qz.com/quote/AAPL)[TSM+1.44%](https://qz.com/quote/TSM)[NVDA+3.08%](https://qz.com/quote/NVDA)[ASML+1.28%](https://qz.com/quote/ASML) Despite its [comeback to compete with Apple](https://qz.com/apple-losing-huawei-china-smartphone-iphone-ai-market-1851672936) in the Chinese smartphone market, Huawei’s latest smartphone shows it is still years behind, researchers found. In November, the Chinese tech giant launched its Mate 70 smartphone series, including the Mate 70 Pro Plus, which is powered by a Kirin 9020 processor. The chip, however, uses 7-nanometer processing technology — the same process node [used in the Mate 60](https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360?_gl=1*12635si*_ga*MjMyMTcyODYuMTcwNzE2NTQ5Mg..*_ga_V4QNJTT5L0*MTczMzkyNzAzNi40MDIuMS4xNzMzOTI4OTk2LjU5LjAuMA..) that it released last August, according to [a teardown](https://library.techinsights.com/public/hg-asset/e71466a2-64ef-410a-af5f-b3d001bd2318?utm_source=bloomberg&utm_medium=referral&utm_campaign=Huawei%20Mate%2070%20Pro%20Series#moduleName=Search&reportCode=FCT-2412-801&subscriptionId=null&channelId=null&reportName=HiSilicon+Kirin+9020+from+Mate+70+Pro+Plus+-+Die+Analysis) by researchers at TechInsights. The 7-nanometer process node means Huawei is about 5 years behind Taiwan Semiconductor Manufacturing Company ([TSM+1.44%](https://qz.com/quote/TSM)), the manufacturing partner to Nvidia ([NVDA+3.08%](https://qz.com/quote/NVDA)) and Apple ([AAPL\-0.58%](https://qz.com/quote/AAPL)), which released its first 7-nanometer chip in 2018. In April, U.S. Secretary of Commerce Gina Raimondo said Huawei’s Mate 60 signaled that [U.S. export controls](https://qz.com/china-huawei-chip-us-sanctions-gina-raimondo-1851425501) on advanced technology “are working because that chip is not nearly as good” and “years behind what we have in the United States.” “We were expecting to find the Kirin 9100 chipset in the Mate 70 line-up,” TechInsights said, adding that China’s Semiconductor Manufacturing International Corporation, which manufactures chips for Huawei, was rumored to have used 5-nanometer processing technology for the chip. TSMC, which makes a majority of the world’s advanced chips, has said it [expects volume production of 2-nanometer chips](https://www.tsmc.com/english/dedicatedFoundry/technology/logic/l_2nm) in 2025 — three generations ahead of Huawei. Meanwhile, Huawei’s next two Ascend processors are being [designed with the 7-nanometer process](https://qz.com/huawei-advanced-chips-ai-smartphone-china-us-sanctions-1851702545), Bloomberg [reported](https://www.bloomberg.com/news/articles/2024-11-19/china-s-chip-advances-stall-as-us-curbs-hit-huawei-ai-product?srnd=homepage-americas&sref=P6Q0mxvj) in November. The stalled efforts are reportedly due U.S.-led export controls that don’t allow Huawei’s Chinese chipmaking partners to get extreme ultraviolet lithography machines from the Netherlands-based ASML ([ASML+1.28%](https://qz.com/quote/ASML)). In October, TechInsights took apart Huawei’s Ascend 910B chip and [found TSMC-made technology](https://qz.com/tsmc-told-us-government-huawei-export-controls-ai-chips-1851678301) — a possible violation of U.S. trade restrictions. At the same time, SMIC is reportedly having issues producing steady yields — or the amount of functional chips it can produce per manufacturing process — of 7-nanometer chips. One person told Bloomberg that Huawei may not have enough chips for AI and smartphones in the next few years.