Huawei's AI Chip Secret: Stockpiles of Foreign Tech Fuel Its Nvidia Challenge

Huawei's push into AI semiconductors could be facing a turning point. A detailed teardown of its Ascend 910C processor revealed that some of its most advanced chips still rely on foreign technology, including dies from Taiwan Semiconductor Manufacturing Co. and high-bandwidth memory from Samsung Electronics (SSNLF) and SK Hynix (HXSCL). The findings suggest that Huawei, despite efforts to scale domestic production, has leaned heavily on stockpiles of restricted components obtained before Washington tightened export rules. Suppliers reiterated they no longer deal with Huawei, but the presence of their hardware underscores just how dependent China's leading AI chipmaker remains on overseas technology.

SemiAnalysis estimates Huawei secured nearly 2.9 million TSMC-made dies through an intermediary, Sophgo, which later faced US sanctions after reselling to the company. Those stockpiles have allowed Huawei to keep shipping the 910C, which is built by packaging two older-generation dies together. TSMC has confirmed it has not supplied Huawei since 2020, while Samsung and SK Hynix emphasized strict compliance with US export rules. Even so, investigators found that Huawei paired those older dies with HBM2E memory, a component critical to powering AI systems and historically difficult for Chinese firms to manufacture domestically at scale.

For investors, the implications are twofold. On one hand, Huawei's ability to mass-ship the 910C shows resilience, keeping China competitive against Nvidia NVDA in the near term. On the other, analysts warn that once Huawei burns through its HBM stockpile, possibly by year-end, production could face serious constraints. With US restrictions extending to newer memory generations, and domestic alternatives like CXMT still in development, Huawei's longer-term ability to sustain momentum may depend on whether local supply chains can mature fast enough to fill the gap.