In recent years, US sanctions have compelled China to prioritize the development of its domestic chip industry. Nvidia’s prominent position in AI chips, coupled with US restrictions, has presented significant challenges for Chinese technology firms. In an interview with the Financial Times in May 2023, Nvidia CEO Jensen Huang cautioned that China would pursue the production of its chips if access to US chips was restricted. While bridging the technology gap with Nvidia in the near term seems unlikely, China is home to several promising companies that could potentially rival Nvidia in the future.
Huawei, a leading Chinese technology company, operates across telecommunications, consumer electronics, and cloud computing. Its chip design unit, HiSilicon, has developed the Ascend chip line, integrated into Atlas servers utilized in data centers for training AI models. Huawei anticipates that by 2023, Ascend chips will be employed in training nearly half of China’s 70 leading large language models (LLMs). Currently, Huawei’s chip generation is Ascend 910B, with plans to introduce Ascend 910C in October 2024. According to reports, the upcoming chip model’s performance may be comparable to Nvidia’s. Despite this, some businesses are cautious about purchasing Huawei’s AI chips due to the company’s requirement to buy accompanying products like network and storage solutions.
Nvidia’s annual report for early 2024 identifies Huawei and several other companies as competitors in the fields of chips, AI software, and networking products. While Alibaba and Baidu continue to procure chips from Nvidia, they are actively engaged in developing their own AI chips. Baidu designs chips under the Kunlun brand name, primarily used in data centers and the autonomous vehicle sector. Meanwhile, Alibaba’s T-Head chip design unit unveiled the Hanguang 800 in 2019, leveraging it to enhance product recommendation systems and improve user experience on e-commerce platforms.
Biren Technology and Moore Threads are two GPU design companies viewed as potential contenders to meet the growing chip demand in China. However, both companies rely on external chip processing factories, and their collaboration with TSMC was affected by US regulations. In 2023, Biren and Moore Threads were added to the US “blacklist,” restricting their access to advanced technology. To endure, these companies must strive to develop their chip manufacturing technology and equipment, aiming for self-sufficiency.
Cambricon Technologies designs a range of semiconductor chips, from those used for training AI models to chips running AI applications on devices. Facing financial challenges after being placed on the US list of entities that threaten US security, the company laid off numerous employees in 2023. Enflame Technology, a chip startup backed by Tencent, has had to modify its chip design to align with TSMC’s production requirements. Despite not being embargoed, the company encountered challenges in producing chips as desired, highlighting the complexities of chip production even for non-embargoed entities.
