China’s Semiconductor Progress Stalls Amid U.S. Export Restrictions on Huawei

China’s chip-making ambitions have run into a wall as U.S. sanctions continue to clamp down on Huawei’s AI endeavors.?

The tech giant is struggling to keep up with global competitors in the race for cutting-edge semiconductor technology.

Per a Bloomberg report, Huawei has been reportedly forced to fall back on outdated 7-nanometer architecture for its upcoming Ascend processors, designed to take on Nvidia’s dominant AI chips.

This setback is attributed to U.S.-led restrictions, which have prevented Huawei’s partners from accessing ASML’s advanced lithography systems and limited the export of advanced AI chips from TSMC.

China Fights Back with Massive Chip Fund

Despite being backed into a corner, China isn’t throwing in the towel. The nation is reportedly gearing up to roll out its largest chip fund yet, drumming up over $27 billion to prop up its semiconductor industry. Huawei, in a show of self-reliance recently launched the Kirin 9000s chip in the Mate 60 Pro.

However, the effectiveness of China’s efforts remains uncertain. While Chinese firms like Huawei and Semiconductor Manufacturing International Corporation (SMIC) have made some progress, they still rely heavily on the U.S. for advanced processors.

Last month, a TSMC chip was reportedly found in Huawei’s “Ascend 910B AI processor, prompting an investigation by the U.S. government. However, TSMC has refuted these claims, asserting strict adherence to U.S. export controls and denying any involvement in the investigation.

The ongoing tech rivalry between the U.S. and China has led to increased scrutiny of companies like ASML, the world’s largest supplier of chipmaking equipment.

Early this year, ASML warned that any further expansion of chip curbs targeting its exports to China remains a significant business risk. The Dutch company has already been restricted from selling its most advanced chipmaking tools to Chinese customers since 2019.