Huawei Makes Strides, Yet U.S. Claims China’s Advanced Chip Production Capped at 200K

Key Takeaways

The U.S. export restrictions are hindered in China’s capability to produce advanced semiconductors, with an estimated output of only 200,000 high-end chips.
Huawei plans to deliver over 800,000 AI chips this year, challenging the U.S. estimates and showcasing advancements in China’s semiconductor sector.
Domestic Chinese chipmakers are expected to capture 40% of the AI server market share by 2025, reducing reliance on imports significantly.

U.S. Export Controls Impacting China’s Chip Production

As the U.S. tightens restrictions on advanced semiconductor technologies, particularly targeting NVIDIA’s H20 chip in China, Commerce Secretary Howard Lutnick claims that China remains unable to mass-produce competitive advanced chips. According to Lutnick, China’s current production capacity for high-end chips, essential for AI and smartphones, is limited to around 200,000 units, far surpassing domestic demand, as reported by Bloomberg.

Concerns surrounding China’s semiconductor capabilities have intensified, especially after Huawei introduced a smartphone featuring a 7nm chip earlier in 2023. The Wall Street Journal further highlights that Huawei is gearing up to test its next-generation AI chip, the Ascend 910D, with sample availability as early as late May. Additionally, Huawei is projected to deliver over 800,000 units of its existing Ascend 910B and 910C chips this year to customers, including major telecom firms and tech company ByteDance, which directly contradicts Lutnick’s estimate.

In this changing landscape, TrendForce reveals that amid geopolitical tensions and shifts in the supply chain, local Chinese manufacturers like Huawei and Cambricon are playing increasingly pivotal roles. The AI server market in China is adjusting to the new U.S. export controls enacted in April 2025. These controls are expected to lead to a marked reduction in the share of imported chips from companies like NVIDIA and AMD, decreasing from 63% in 2024 to approximately 42% in 2025.

Furthermore, it is projected that domestic chipmakers will gain significant ground, achieving around 40% of the AI server market share, nearly competing with imported chips. This growth is bolstered by strong government incentives aimed at promoting the development and production of homegrown AI processors.

Overall, while the U.S. export restrictions aim to curb China’s semiconductor advancements, the rising domestic capabilities, especially from companies like Huawei, suggest that the landscape may shift in favor of local production, impacting global semiconductor dynamics moving forward.

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