Huawei Targets 600,000 AI Chips by 2026 Amid Semiconductor Supply Chain Push

Huawei, through its chip design arm HiSilicon and manufacturing partner Semiconductor Manufacturing International Corp. (SMIC), is setting ambitious production targets for its Ascend 910C AI accelerator chips. The company plans to manufacture approximately 600,000 units by 2026, a significant increase from previous output levels.

This initiative is part of Huawei's broader strategy to produce 1.6 million chips while overcoming challenges related to yield and memory constraints. Recently, the company introduced two innovative concepts: the “Tau Scaling Law” and “LogicFolding” architecture. These concepts focus on advanced packaging and efficient data movement, moving away from traditional geometric scaling methods in the semiconductor industry.

Huawei claims that this new approach could achieve transistor densities comparable to a 1.4nm process by 2031, without relying on foreign lithography tools restricted by U.S. regulations. However, the company faces significant hurdles in thermal management and power efficiency as it aims to pack more transistors into smaller spaces.

In addition to its chip production goals, Huawei is also investing in domestic lithography equipment manufacturing to strengthen China's semiconductor supply chain. The company is working with local manufacturers to produce deep ultraviolet (DUV) photolithography machines, essential for chip production. This effort positions Huawei as a key player in China's push for self-sufficiency in semiconductor manufacturing.

Analysts predict that Huawei will capture about 50% of China's AI chip market by 2026, while Nvidia's market share in China is expected to drop significantly. The success of Huawei's ambitious production targets will depend on SMIC's ability to achieve consistent manufacturing yields at this level of complexity.