Chinese tech giant Huawei Technologies has made a significant stride in the global AI chip race, unveiling a high-performance processor designed to rival Nvidia’s leading models. The move comes as U.S. export restrictions continue to block Nvidia from selling advanced AI chips to Chinese customers.
Huawei Steps In as Nvidia Faces Trade Headwinds
According to a Reuters report, Huawei has already begun limited shipments of its Ascend 910C AI chip, with mass production slated for next month. The chip serves as a replacement for Nvidia’s H20, a processor now banned from export to China.
The 910C chip reportedly matches the performance of Nvidia’s H100, a flagship AI chip launched in 2022. Huawei achieved this by combining two of its 910B chips using advanced integration technology.
U.S. Trade Policy Shakes Up Global Chip Market
Earlier this month, the Trump administration informed Nvidia that an export license would be required to sell the H20 processor in China and other restricted markets. With little expectation of obtaining approval, Nvidia is writing off up to $5.5 billion in inventory in its fiscal Q1.
Nvidia rival AMD has also been affected. The U.S. government restricted sales of its MI308 chips to China, prompting a projected $800 million inventory and purchase commitment charge.
These policy moves aim to curtail China’s access to cutting-edge AI hardware, but they are also opening opportunities for domestic players like Huawei.
Huawei’s Roadmap: The Ascend 920
Huawei isn’t stopping at the 910C. It plans to launch its next-generation Ascend 920 chip later this year. The upcoming processor is rumored to match the performance of Nvidia’s H20, according to Tom’s Hardware.
Huawei’s chip production is being supported by Semiconductor Manufacturing International Corp (SMIC), China’s top foundry. However, SMIC still faces technical challenges.
“SMIC continues to struggle with yield rates required for advanced AI chip production,” noted Matt Bryson, Analyst at Wedbush Securities. “But if SMIC overcomes these issues—and U.S. restrictions stay in place—Huawei could permanently erode Nvidia’s foothold in the Chinese market.”
Market Reaction: Nvidia and AMD Stocks Slide
The impact on financial markets has been immediate:
- Nvidia (NVDA) shares fell 4.5%, closing at $96.91 on Monday.
- AMD dropped 2.2%, ending the day at $85.56.
Year-to-date, Nvidia’s stock is down nearly 28%, reflecting investor concerns over trade tensions and AI chip supply limitations.
