Huawei faces production hurdles as AI chip demand surges, impacting Mate 60 phones
Huawei
Huawei, the Chinese tech giant, is facing production challenges as it grapples with surging demand for its artificial intelligence (AI) chips, leading to a slowdown in the manufacturing of its premium Mate 60 smartphones.
This is based on a Reuters report.
The company's production facility, responsible for both Ascend AI chips and Kirin chips, has encountered manufacturing constraints, with a low yield rate affecting output quality.
The situation indicates the complexities faced by Huawei as it navigates a global race for AI functionality amid a Sino-US technological standoff and aims to rebuild its smartphone unit following US sanctions in 2019.
Sources familiar with the matter told Reuters that Huawei has prioritised the production of Ascend chips over Kirin chips, leading to the slowdown in manufacturing for Mate 60 smartphones.
The shift in priorities is a strategic response to the soaring demand for AI chips, reflecting Huawei's efforts to remain competitive in the market.
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The global race for AI functionality, coupled with US restrictions on the sale of AI processing chips to China, has intensified the challenges faced by Huawei, which has been compelled to explore domestic alternatives to meet its requirements.
Analysts speculate on Huawei's chip manufacturing capabilities, saying that advancements in Huawei's chip technology became apparent with the unanticipated August launch of the Mate 60 series, featuring Chinese-made chips capable of fifth-generation (5G) telecommunication speeds.
The production bottleneck, particularly with Mate 60 handsets consistently out of stock, has drawn attention to the intricacies of Huawei's chip manufacturing process.
The company is reportedly working to improve the yield rate, hoping that the current production arrangement is a short-term measure.
Huawei's challenges in AI chip production also impact other products, including the Ascend-equipped computing unit MDC 810, which powers advanced driver assistance systems.
Last week, Reuters reported that Chinese automakers had to delay the delivery of flagship models due to production issues with the MDC 810.
(With inputs from Reuters)