Huawei Scales Back Smartphone Chip Production — AI Accelerators Take Precedence

Due to surging demand for AI accelerator chips and limited manufacturing capacity, Huawei has pivoted to focus on AI chip production, slowing down the production of smartphone processors. This move has affected the manufacture of the flagship Mate 60 smartphones, Reuters reports, citing informed sources.

According to sources, Reuters reported that both the AI accelerators Ascend and the Kirin chips used in Mate 60 smartphones are produced in the same facility. During the production of Ascend AI accelerator chips, the yield was higher than that of the Kirin. As a result, Huawei had to opt to slow down smartphone production. The company is also working on improving the quality of production to increase the yield of usable chips from each wafer, with the hope that this situation will be temporary.

The accelerating AI market race coupled with technological tensions between China and the US has caused Huawei to prioritise the production of AI chips over smartphones. This shift follows their achievement of becoming the leader in smartphone sales in China for the first time in over three years. This success was made possible with the Mate 60 smartphone series’ launch, developed with a domestic 5G-supported chip. The inclusion of a state-of-the-art HiSilicon Kirin 9000S processor in the Chinese smartphone demonstrated the ineffectiveness of US sanctions, raising questions from the US authorities and prompting an investigation by the US Department of Commerce.

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