Huawei prepares for launch, but what product it will be remains a secret

Huawei Technologies, the Chinese telecommunications giant, has been reeling under U.S. sanctions in 2020, cut off from key chip supplies. But last year it surprised Washington with a new smartphone featuring an advanced semiconductor.

Now the company is about to reach another milestone.

Huawei’s fall launch event, scheduled for Monday and Tuesday in Shenzhen, will be led by its secretive chip design unit, HiSilicon. When the event was first announced, it sparked considerable speculation thousands of miles away in the U.S.

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Some US analysts expect Huawei to unveil a groundbreaking artificial intelligence semiconductor that could compete with high-end chips that US tech giants like Nvidia are banned from selling to China.

Such a development, they say, could undermine the market share that Nvidia and other U.S. chip companies have built in China and the Global South. It could also prompt Washington to reconsider its sanctions-based approach to curbing China’s technological advances.

Still, the U.S. government took a step further Friday in restricting access to advanced technology for rivals like China, when the Commerce Department announced it would tighten export controls on quantum computers and advanced chip manufacturing tools.

The interim rules include exemptions for countries taking similar measures. Notably, the Netherlands, home to Dutch tech giant ASML, has also expanded its export restrictions on advanced chip technologies.

Huawei faces significant challenges, according to analysts, including reported performance issues and difficulties in mass producing advanced chips due to US restrictions and an underdeveloped semiconductor ecosystem.

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Industry experts also note that Huawei is under intense pressure to release new products to compete with its U.S. and South Korean rivals. The conference could unveil innovations beyond telecoms and chips, reflecting the company’s portfolio expansion over the past five years.

According to Long Le of Santa Clara University’s Leavey School of Business, the conference will potentially spotlight two sets of its chips: the Kirin 9000s series for smartphones and the A910 series designed for advanced AI models.

Le believes Huawei will introduce the most advanced version of its A910 series yet: the A910-C, an upgrade of the A910-B chip.

“There’s a lot of speculation whether this device will compete with Nvidia’s H100 or B20 chips,” he said, adding: “I do think the Huawei A910-C will be quite comparable to Nvidia’s H100.”

Huawei is already a major competitor to Nvidia in China, Le said, adding that “many companies” are testing the A910-C.

An Nvidia HGX H100 artificial intelligence supercomputer graphics processing unit (GPU) on display at the company’s office in Taipei on June 2, 2023. Photo: Bloomberg alt=An Nvidia HGX H100 artificial intelligence supercomputer graphics processing unit (GPU) on display at the company’s office in Taipei on June 2, 2023. Photo: Bloomberg>

Any breakthrough in this series, he said, would highlight how the U.S. ban on sales to Chinese companies could spur innovation in China.

In October 2022, the Ministry of Commerce imposed export controls to limit China’s access to advanced computer chips, hinder the development and maintenance of supercomputers, and restrict China’s semiconductor manufacturing capacity.

The ban prompted Nvidia, a technology company based in Santa Clara, California, to develop three chips specifically for the Chinese market. The most advanced Nvidia chip now available in China is the H20, a version of the H200 chip offered to other customers that is capable of running AI workloads with lower computing power.

Research group SemiAnalysis estimates that Nvidia could sell more than 1 million H20 chips in China this year, generating about $12 billion in revenue. Due to weaker-than-expected demand when deliveries began in January, Nvidia has reportedly priced the H20 below a competing chip from Huawei.

The Chinese economy accounted for about 17 percent of Nvidia’s revenue for the year ended in January, down from 26 percent two years earlier, largely due to U.S. sanctions and increased competition from China-based chipmakers.

“It’s really interesting to see that the ban has really created this innovation and self-reliance, paradoxically,” Le said. If Huawei makes a significant breakthrough at the conference, he said, U.S. President Joe Biden may have to reevaluate the sanctions his administration has imposed.

According to Anil Khurana, director of Georgetown University’s Baratta Center for Global Business, while the A910 series competes with Nvidia’s H100, there’s still a significant performance gap. Price and manufacturing could be the deciding factors.

A “breakthrough” at the conference, he said, could only happen if the company makes new announcements about manufacturing. “That’s where Huawei has always had big challenges, and that’s not easy because to do that, they would have to build a whole ecosystem,” Khurana added.

Still, Khurana argued that Nvidia “will definitely lose market share in China, whether that’s in two months or six months,” and said that with the A910, Huawei could offer “an affordable chip for AI, an affordable platform for the global south.”

“So the market for Huawei is Africa, Asia and parts of Europe,” Khurana said.

Huawei advertises its Mate 60 smartphone, powered by a Kirin 9000s chip, at a company store in Shanghai on August 31, 2023. Photo: EPA-EFE alt=Huawei advertises its Mate 60 smartphone, powered by a Kirin 9000s chip, at a company store in Shanghai on August 31, 2023. Photo: EPA-EFE>

Huawei is also expected to unveil its ‘triple’ phone during the conference, hours after US tech giant Apple launched the iPhone 16 series.

Paul Triolo of the Albright Stonebridge Group, a Washington-based consulting firm, noted that “there is a lot of pressure on Huawei to keep releasing new products.” These include advanced core semiconductors, high-end smartphones and server chips that are essential for training large language models.

“The company is still under enormous pressure to continue to demonstrate that it can develop more advanced products and keep pace with Apple, Samsung and even Nvidia in terms of raw computing and consumer performance,” he said.

Triolo noted that Huawei has emerged as a multifaceted technology conglomerate, engaging in AI development, telecommunications hardware, consumer goods, self-driving vehicles and more.

“Whatever happens at the conference, Huawei’s continued resurrection as the country’s most innovative technology company, which has been able to withstand the full might of a nation state arrayed against it, is assured,” he said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook page and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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