Huawei has made a significant change in strategy and decided to increase the production capacity of its artificial intelligence (AI) chip Ascend 910B. This decision means that the company will reduce production of Mate 60 phones in at least one production facility. This move by Huawei is considered as an indicator of its belief in AI technologies and its investments in this field.
Huawei focuses on Ascend 910B AI chip production
Huawei produces both the Ascend AI chip and the Kirin chip that powers the Mate 60 phones at the same facility. However, according to relevant sources, the production capacity of the facility remained low. This is seen as one of the underlying reasons why the company decided to prioritize AI chip production. Ascend chips are used in training AI models and the demand for these chips is increasing, especially in the local market. By postponing the production of Mate 60 chips, Huawei has the opportunity to increase the number of usable and salable chips from the facility.
In 2023, the Mate 60 enabled Huawei to surpass Apple’s phone sales within China, according to the South China Morning Post. In light of this success, slowing down production is an interesting bet on the company’s belief in the importance of AI.
Following US restrictions on chip exports, Chinese AI companies are struggling to access highly sought-after AI chips such as Nvidia’s H100. This is pushing Chinese AI developers to use domestic alternatives such as Huawei’s Ascend 910B.
Although Chinese companies are trying to raise the flag on productive AI, they remain at a slight developmental disadvantage compared to the United States. While companies like Baidu have released large language models and chatbots, they have yet to reach the scale of OpenAI’s ChatGPT or Google’s Bard. China was the first country to come forward with its AI policies, requiring companies working on AI products to go through an approval process before making them public.
This strategic move by Huawei reveals the company’s strong belief in AI technology and its aim to become a leader in this field. The slowdown in the production of the Mate 60 is considered an important step taken by Huawei to further strengthen its place in the technology world by focusing on AI chip production.