As the United States controls the export of NVIDIA's mid-range artificial intelligence (AI) chips to China, Huawei, which has unveiled its next-generation AI chip, is reportedly making significant efforts to secure the 4th generation high bandwidth memory (HBM3). While Huawei has equipped its next-generation AI chips with HBM3 to enhance performance, it is known to be seeking ways to circumvent the export regulations announced by the U.S. government regarding HBM last year.
According to industry sources on the 22nd, Huawei plans to begin mass production of the next-generation AI chip "Ascend 920," which was unveiled on the 19th (local time), as early as the second half of this year. This AI chip is expected to be manufactured using the 6 NANO (nanometer) process of the Chinese foundry corporation Semiconductor Manufacturing International Corporation (SMIC). The Ascend 920 will be equipped with HBM3.
The Chinese AI industry is in a predicament as NVIDIA's mid-range AI chip H20, which has been widely used for running AI models, is now subject to U.S. export regulations. Huawei, at the forefront of China's semiconductor ambitions, announced the release of its next-generation AI chip Ascend 920 to replace it. The Ascend 920 is reported to have performance improvements of over 40% compared to the previous generation. The inference performance of Huawei's previous generation AI chip, Ascend 910C, is estimated to be around 60% of NVIDIA's advanced AI chip H100.
The issue lies in the uncertainty surrounding the smooth supply of HBM3, which will be equipped in the Ascend 920. Currently, the only corporations capable of developing and mass-producing HBM3 are Samsung Electronics, SK hynix, and Micron. However, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced in December that it would enhance export controls to limit China's military semiconductor production capabilities, adding certain HBM to the list of controlled items. It is reported that Huawei is utilizing HBM3 purchased in bulk before the export regulations took effect in its products.
There are also suspicions that Huawei may be utilizing overseas intermediary companies to supply HBM3 by soldering it in AI accelerators equipped with HBM3. According to semiconductor analysis firm SemiAnalysis, Huawei is said to have procured HBM in bulk by purchasing custom semiconductor (ASIC) chips equipped with HBM from overseas semiconductor corporations, then soldering on HBM for use.
The Economic Daily reported, "The supply of HBM could become a bottleneck for Huawei's mass production of next-generation AI chips," adding, "It has not been confirmed whether Huawei secured HBM3 by soldering existing products, but it shows that they are making every effort to secure HBM3."
Another issue is that SMIC's 6 NANO foundry process for chip manufacturing is still not mature. Huawei opted for the 6 NANO process to improve performance compared to previous chips utilizing SMIC's 7 NANO process, but yield rates remain low. SMIC has been unable to secure ASML's extreme ultraviolet (EUV) lithography equipment, essential for processes below 7 NANO, due to U.S. export regulations, thus replacing it with the older deep ultraviolet (DUV) equipment. In this scenario, processes that could be completed in 1 to 2 steps using EUV must be repeated at least 3 times, resulting in low yield and high production expenses.
A semiconductor industry official noted, "There are concerns not only about the foundry process of SMIC that produces chips but also about whether it will be able to smoothly secure HBM for AI chips. Indeed, it is true that Chinese corporations, including CXMT, have not yet started mass production of HBM3 and will look for ways to secure it circumventing regulations."