China's Huawei Reportedly Doubles AI Chip Yields To 40% — Now, Nvidia CEO Jensen Huang Warns That The Chinese Tech Giant Is The 'Most Formidable' Competitor Despite US Sanctions

Last week, Nvidia Corporation (NASDAQ:NVDA) CEO Jensen Huang said Huawei Technologies Co. has become the "single most formidable technology company" in China.

What Happened: In an interview with the Financial Times, Huang spoke about Huawei’s rapid advancement in AI, particularly highlighting the company's improving ability to manufacture high-performance chips.

"Huawei's presence in AI is growing every single year," Huang said. "We can't assume they are not going to be a factor."

Despite efforts by the U.S. government to restrict Huawei's access to advanced chips and technology, the company continues to push forward.

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The Chinese telecommunications and consumer electronics giant has reportedly doubled the yield rate on its latest AI chips from around 20% a year ago to approximately 40% now.

This also marks a significant leap in China’s effort to build a self-sufficient semiconductor ecosystem.

"They have conquered every market they've engaged," Huang said, calling out what he described as poorly executed sanctions against the company.

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Why It's Important: The U.S. has imposed technology restrictions on Huawei since 2019 over national security concerns. Despite this, Huawei’s revenue grew by 22% in 2024, reaching 860 billion yuan ($118.27 billion).

Huawei entered China’s AI chip market with its Ascend processors, focusing on inference tasks and challenging Nvidia’s stronghold in AI training. In 2024, Nvidia generated $12 billion in sales in China, selling twice as many AI chips as Huawei’s Ascend 910 B.

Huawei's growth could also be credited to the Chinese government's support, which has encouraged major domestic companies to prioritize Huawei's AI chips over Nvidia's.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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