Low yield for SMIC-Huawei Nvidia knockoff? So what?

Semiconductor Manufacturing International Corp (SMIC), the world’s third largest chip-foundry after Taiwan’s TSMC and South Korea’s Samsung, is reportedly struggling to increase the production yield of an artificial intelligence (AI) chip for Huawei Technologies.

Since last year, SMIC has been making Huawei’s Ascend 910B, a 7 nanometer chip which is said to be equivalent to 80% of Nvidia’s A100 in terms of AI-training efficiency. Chinese media reports said earlier this year that Huawei could make about 400,000 to 500,000 units of Ascend 910B in 2024.

On June 25 The Information, a San Francisco-based technology news website, reported that Huawei has faced obstacles in the manufacturing of Ascend 910B chip since officials of the United States Department of Commerce urged chip-making equipment makers and suppliers to stop shipping products to SMIC.

It said Huawei will have to delay its shipment of the AI chip to Chinese customers including Tencent, Baidu, ByteDance and Alibaba.

A follow-up story published by the Chosun Daily in South Korea on June 27 said that the production yield of Ascend 910B is around 20%.

It said SMIC has been mass producing the chip for more than six months but four out of five chips are still defective. The two reports were widely quoted by technology websites and Taiwanese media on June 28.

However, a calculation made by Asia Times with public figures showed another picture: Despite a 20% yield, Huawei can still finish its target of making 400,000 to 500,000 Ascend 910B chips with ease this year.

Since 2019, SMIC has relied on Semiconductor Manufacturing South China Corp (SMSC), its 38.52%-owned unit, to produce 14nm or below chips.

SMSC has two fabs in Shanghai, known as SN1 and SN2, each