Huawei Ascend Production Ramp: Die Banks, TSMC Continued Production, HBM is The Bottleneck

2025-09-08 · Source: SemiAnalysis · Field: Technology & Digital — Artificial Intelligence & Machine Learning, Emerging Technologies & Innovation, AI Hardware & Geopolitics · Depth: Advanced, extended

Summary

China is aggressively pursuing silicon self-sufficiency, particularly in AI compute, driven by US export controls that have limited access to advanced Western hardware. Huawei is central to this strategy, vertically integrating its chip ecosystem from design to fabrication, including establishing its own fabs and tool company, SiCarrier, which recently raised $2.8 billion. Despite these efforts, China's AI accelerator production, specifically Huawei's Ascend chips, remains bottlenecked by High Bandwidth Memory (HBM) supply. While Huawei shipped 507,000 Ascend units in 2024 and is projected to ship 805,000 this year, a significant portion relied on a "Die Bank" of 2.9 million Ascend die from TSMC and 13 million HBM stacks from Samsung, procured before stricter controls. This HBM stockpile is expected to run out within nine months, severely limiting future Ascend production unless domestic HBM production from CXMT can rapidly scale, which is currently forecast to produce only 2 million HBM stacks next year, sufficient for 250,000-300,000 Ascend 910C chips.

Key takeaway

For investors tracking the global semiconductor and AI landscape, understand that China's domestic AI compute capabilities are heavily constrained by HBM supply, despite significant investments in Huawei's chip production and SMIC's capacity ramp. The US government's decision on allowing more powerful Nvidia Blackwell chips into China will directly impact the pace of Chinese AI development and its ability to compete globally. Your investment decisions should factor in the critical role of HBM as a chokepoint and the potential for increased domestic production or continued smuggling to alter market dynamics.

Key insights

China's drive for AI compute self-sufficiency is bottlenecked by HBM supply, despite significant domestic chip production efforts.

Principles

• Export controls drive domestic adaptation and vertical integration.
• Supply chain chokepoints can be exploited for strategic advantage.

Method

China's strategy involves vertical integration of the semiconductor stack, funneling resources to national champions like Huawei and CXMT, and exploiting lags in international export control enforcement to stockpile critical components.

In practice

• Monitor HBM supply as a key indicator of China's AI compute capacity.
• Strengthen international coordination on export control timelines and re-exporting.

Topics

• AI Compute
• Export Controls
• Semiconductor Manufacturing
• Huawei Ascend
• High Bandwidth Memory

Best for: Investor, Policy Maker, CTO, AI Architect

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Editorial summary, takeaway, and curation by AIssential. Original article published by SemiAnalysis.