Huawei braces for $12B in AI chip revenue-Chinese fabs can barely keep up (www.tomshardware.com)

Huawei anticipates a significant increase in AI chip revenue, projecting around $12 billion by 2026, a sizable jump from $7.5 billion in the previous year. This growth is fueled by orders from major Chinese tech giants like Alibaba and Tencent, positioning Huawei as a leading supplier in a domestic AI chip market expected to reach $67 billion by 2030. Notably, Nvidia's share of the Chinese AI accelerator market has plummeted to zero, underscoring a rapid market shift that has propelled Huawei's Ascend 950PR processor to the forefront, particularly after the release of DeepSeek’s V4 large language model optimized for Huawei's architecture. The collaboration with DeepSeek has significantly accelerated the procurement of Huawei's chips, with reports indicating that the 950PR is currently the only Chinese-made AI processor supporting FP8, which enhances operational efficiency. However, challenges remain for Huawei as it depends on SMIC for chip production, which is struggling to meet burgeoning demand. With SMIC’s 7nm-class manufacturing process yielding fewer good dice per wafer compared to competitors like TSMC, and a cycle time almost three times longer, meeting market demand could prove problematic. In contrast, China's reliance on domestic alternatives is expected to grow, particularly with Huawei's forthcoming training-focused 950DT chip, further shaping the competitive landscape in AI hardware.