AI Chip Demand Surge Impacts Huawei Mate 60 Production: What Lies Ahead?

The Chinese technology giant Huawei is currently encountering production hurdles due to a surge in demand for its AI chips. This surge has resulted in a slowdown in the manufacturing of its high-end Mate 60 smartphones. Manufacturing constraints have been observed at Huawei’s production facility, which handles the production of both Ascend AI chips and Kirin chips. These constraints have resulted in a lower yield rate, impacting the quality of output.

The challenges highlight the intricate landscape Huawei is navigating as it competes globally in the race for AI capabilities amidst a technological standoff between China and the US. Additionally, the company is striving to revive its smartphone division following sanctions imposed by the US in 2019. Insiders disclosed that Huawei has prioritized the production of Ascend chips over Kirin chips, resulting in a slowdown in manufacturing for Mate 60 smartphones. The change in priorities reflects Huawei’s strategic response to the increasing demand for AI chips. It demonstrates its commitment to staying competitive in the market.

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The intensified global competition for AI functionality, along with US restrictions on the sale of AI processing chips to China, has added to the challenges for Huawei. This has led the company to explore domestic alternatives to meet its requirements. Analysts are speculating about Huawei’s chip manufacturing capabilities, noting advancements in their technology. This was evident with the unexpected August launch of the Mate 60 series, which featured Chinese-made chips capable of 5G telecommunication speeds.

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The production bottleneck especially concerns Mate 60 handsets consistently being out of stock. It has brought focus to the complexities of Huawei’s chip manufacturing process. Reportedly, the company is striving to enhance the yield rate. It aims for the current production arrangement to be a short-term measure. The challenges Huawei faces in AI chip production also extend to other products. One such example is that of the MDC 810, a computing unit equipped with Ascend chips. It is integral for powering advanced driver assistance systems.

Stay tuned for more updates about the Huawei Mate 60!!!