From Nasdaq:

Huawei is prioritizing the production of its Ascend AI chips over its premium Mate 60 phones due to the high demand for the AI chips and manufacturing constraints. The global race for AI functionality has resulted in the company prioritizing this production. This has caused Huawei to slow production for its top-selling Mate 60 phones.

The Chinese tech giant declined to comment on the situation. This rare peek into Huawei’s challenges comes as the company works to rebuild following U.S. sanctions in 2019. The impact of U.S. restrictions on sales of AI processing chips to China is also illustrated, as the market was 90% controlled by U.S. giant Nvidia before the latest curbs in October.

Huawei has been low-key regarding its chip manufacturing capability, with little public information on its progress. Online tear-downs found that the Mate 60 series contains a Chinese-made chip capable of fifth-generation (5G) telecommunication speeds. This achievement may have come from collaborating with China’s largest contract chipmaker, SMIC.

The process used by Huawei to achieve this technological feat is likely laborious, expensive, and less productive than using the more advanced extreme ultraviolet machines that the United States has prevented third countries from selling to China. Even with production slowdowns due to prioritizing AI chips, Huawei’s Mate 60 series has helped it regain its status as China’s top smartphone seller, with the series largely responsible for this achievement. Other products affected by the production bottleneck include Huawei’s Ascend-equipped computing unit MDC 810, which powers advanced driver assistance systems.



Read more: EXCLUSIVE-AI chip demand forces Huawei to slow smartphone production -sources