Key Points:
- Software issues and production challenges hinder Huawei’s efforts to develop AI chips to compete with Nvidia.
- Customers report performance problems and difficulties transitioning from Nvidia products to Huawei’s Ascend series.
- Production of Ascend 910B chips at SMIC faces low yields.
China’s push to match U.S. computing power in AI is encountering significant challenges, with Huawei facing setbacks in both software and production that are slowing its progress.
According to a recent Financial Times report, customers using Huawei’s Ascend series chips are experiencing performance issues and struggling to transition from Nvidia’s industry-leading products.
Huawei’s Software and Performance Struggles
Huawei has positioned itself as China’s leader in developing domestic alternatives to Nvidia’s AI chips, especially after the U.S. imposed stricter export controls on high-performance silicon last October.
However, industry insiders, including AI engineers and researchers, report that Huawei’s chips still lag behind Nvidia’s, particularly in the critical initial training phase of AI models. Much of this is due to limitations in Huawei’s software ecosystem, particularly its Cann software.
Customers and even Huawei employees have described Cann as “difficult and unstable to use.” One anonymous researcher pointed out that poor documentation makes it challenging to identify the source of errors when they arise.
Beyond software issues, Huawei is also struggling with significant production challenges.
In July, a report from a Chinese outlet revealed that Huawei is having difficulty scaling up production of its Ascend 910B AI processors due to low yields at Semiconductor Manufacturing International Co. (SMIC).
Only 20% of the chips produced by SMIC are functioning as intended, which is severely limiting Huawei’s ability to meet demand and advance its AI ambitions.
SMIC had initially aimed to produce 500,000 Ascend 910B chips this year. However, equipment failures and reliance on outdated chip-making tools have hindered the company from reaching this target.
Impact of U.S. Sanctions and Huawei’s Response
The challenges faced by Huawei and SMIC are exacerbated by ongoing U.S. trade restrictions on the Chinese market.
Chinese manufacturers are forced to use older, less efficient equipment, as they cannot access advanced chip-making machinery from companies like ASML.
While competitors such as Samsung and TSMC utilize state-of-the-art Extreme Ultraviolet (EUV) equipment, Huawei and SMIC are limited to older Deep Ultraviolet (DUV) machines. This technological gap leads to higher production costs, increased defect rates, and frequent equipment failures.

Despite these hurdles, Huawei is showing resilience and adaptability in its AI chip development efforts.
The company has implemented a multi-faceted strategy to tackle the issues. One key initiative involves deploying teams of engineers to help customers transition from Nvidia’s Cuda software to Huawei’s Cann software.
However, the road ahead remains challenging. Recent rumors suggested that Huawei was working on more advanced AI chips, specifically the Ascend 910C, with a potential release this September. These new chips were reportedly based on a 5nm process, representing a significant technological leap. Yet, given the current production and software difficulties, the timeline and specifications for these new chips are now uncertain.