Huawei CEO admits company's single chips trail US counterparts by a generation, challenging claims of excessive American success
Fresh Take:
Huawei's CEO, Ren Zhengfei, has been rather candid about the company's chip game in an interview with People's Daily. In the interview, hosted on the CPC's primary mouthpiece, Ren admitted that Huawei's Ascend chip family isn't as powerful as the U.S. might think, casually dropping a major admission for a tech giant at the core of China's pursuit of global tech supremacy.
When asked about the U.S.'s crackdown on Huawei's Ascend chips, Ren stated that American authorities have overhyped Huawei's abilities. He went on to say that the U.S. assessment of Huawei's power is premature, and the company still lags behind U.S. chip technology by a generation.
This revelation is a striking departure from China's long-standing rhetoric that the U.S.'s tech bans won't hamper its progress. It's worth noting that the People's Daily is directly controlled by the CPC and is often considered a barometer of party policies. This public acknowledgment might suggest that China's tech juggernaut is feeling the heat from U.S. restrictions on the Ascend processors.
Tensions between the two nations have been escalating over trade tariffs recently. Fortunately, trade representatives from both sides met in Geneva, Switzerland, and reached a deal to lower tariffs, with the U.S. lowering tariffs to 30% and China to 10%.
China, however, may be ready to extend a few olive branches to the U.S. on select issues. For instance, the U.S. has previously banned the export of electronic design automation software to China - a crucial tool for designing AI chips. This restriction was lifted following a high-level call between U.S. and Chinese presidents.
China's Hand in the Cookie Jar
In response to U.S. tariffs, China has retaliated by restricting its exports of rare earth metals, critical components for chip manufacturing. Even so, the country has recently eased these restrictions for domestic and European chip firms, hinting that it might make significant concessions, like allowing U.S. firms access to rare earths, in exchange for leniency on Huawei.
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Enrichment Insights:- The U.S. Department of Commerce’s new guidelines deem Huawei’s Ascend chips and similar Chinese chips to be subject to a "presumption of a General Prohibition 10 (GP10) violation," effectively making their use or export subject to strict controls and potential violations of U.S. law.- The U.S. has issued guidance indicating that the use of Ascend chips "anywhere in the world" could be interpreted as a violation of American export controls.-These restrictions have significantly constrained Huawei's ability to compete on the global stage and complicated the plans of Chinese firms with international ambitions.-Despite the challenges posed by the U.S. restrictions, China is highly invested in AI chip development, pushing ahead with its ambitions while navigating the complicated regulatory landscape.
- In the realm of finance and business, China might consider making strategic concessions on the export of rare earth metals, key components for chip manufacturing, to the U.S., aiming to receive leniency on Huawei and mitigate the impact of U.S. restrictions on its Ascend processors.
- Owing to the technology-driven restrictions imposed by the U.S. Department of Commerce, Chinese tech giants like Huawei are encountering significant obstacles in their global competition, with the use of Ascend chips being subject to stringent controls and potential legal violations.
