[News] Huawei Reportedly Acquired Over 2 Million AI Chip Dies Manufactured by TSMC Through Shell Companies

According to a report from Central News Agency, the latest report from the Washington-based think tank, the Center for Strategic and International Studies (CSIS), indicates that Huawei has reportedly used shell companies to acquire over 2 million AI chip dies manufactured by TSMC and has stockpiled enough high-bandwidth memory (HBM) to sustain more than a year of production.

Sources cited by CSIS state that TSMC produced over 2 million Ascend 910B processor logic dies, all of which are currently in Huawei’s possession. If this is true, the report notes that it would be sufficient to produce 1 million units of Huawei’s Ascend 910C processors.

Furthermore, industry sources told CSIS that approximately 75% of the Ascend 910C processors have completed the advanced packaging process.

The CSIS report cautions that white-listed companies may be tempted by profit incentives to act as intermediaries, placing orders with TSMC on Huawei’s behalf. Additionally, it warns that Huawei could employ similar tactics to acquire supplies from Samsung or even Intel.

Additionally, according to sources cited by CSIS, Huawei’s internal assessment indicates that its stored HBM supply is sufficient to meet an entire year’s production needs. CSIS suggests that a significant portion of this HBM stockpile might have been purchased from Samsung before new U.S. export on HBM controls took effect in December 2024, potentially through shell companies.

As noted by the report, Chinese companies like Huawei have traditionally relied on two main options for manufacturing their self-designed AI chips: outsourcing production to TSMC or partnering with SMIC for domestic chip fabrication.

However, the report notes that U.S. export controls have severely impacted SMIC, Huawei’s AI chip manufacturing partner, leading to significant challenges. These include low yield rates (around 20%) and a limited monthly production capacity of just 20,000 wafers for its 7nm process technology. Additionally, SMIC is struggling to advance beyond the 7nm node.

As noted by the report, in the AI race, U.S. companies still lead China. However, the gap has significantly narrowed, and even with aggressive export control measures, the U.S. lead may now be less than one or two years.

Without export controls, Chinese companies would likely have already surpassed their U.S. competitors in developing and deploying cutting-edge AI models, as the report highlights.

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(Photo credit: Huawei)