In a move seemingly timed to capitalize on fresh US trade restrictions, Huawei announced its next-generation Ascend 920 AI chip. The unveiling, reported by sources including Digitimes Asia, came just one day after the US government effectively halted sales of Nvidia’s competing H20 chip to China, positioning Huawei to potentially fill a sudden gap in the lucrative Chinese AI market.
The US Department of Commerce action, which took effect April 15, 2025, mandated an “indefinite license” for exporting Nvidia’s H20 and AMD’s MI308 AI chips to mainland China, Hong Kong, and Macau.
Officials cited national security concerns, specifically the risk these chips could be diverted for use in Chinese supercomputing projects. Commerce Department spokesman Benno Kass confirmed the action, stating the department is committed “to acting on the president’s directive to safeguard our national and economic security.”
For Nvidia, the immediate financial fallout was stark: the company disclosed in a regulatory filing a US$5.5 billion charge against its quarterly revenue due to the unsellable H20 inventory and related purchase commitments, accompanied by a roughly 7% slide in its share price.
Huawei’s Ascend 920 Enters the Fray
Set for mass production in the latter half of 2025, the Huawei Ascend 920 is built on a 6nm process node and appears designed to directly challenge the market space previously occupied by the H20. Huawei targets performance exceeding 900 TFLOPs per card. It will utilize HBM3 (High Bandwidth Memory 3) – a stacked memory technology crucial for supplying data quickly to powerful processors in AI workloads – aiming for 4 TB/s of bandwidth.
A specialized variant, the 920C, focuses on efficiency for specific AI architectures like Transformers and Mixture of Experts models, promising a 30-40% improvement over Huawei’s current Ascend 910C chip, which itself delivered performance estimated to be around 60% of Nvidia’s H100.
Simultaneously, Huawei introduced its AI CloudMatrix 384, a large-scale cluster solution. While it claims performance exceeding Nvidia’s flagship GB200 systems, analysis suggests this comes with substantially higher power demands, presenting a potential trade-off for customers balancing performance and operational costs.
Nvidia Scrambles Amid Tightening Restrictions
The ban represents a significant blow to Nvidia, which had specifically designed the H20 to comply with earlier US export controls after its higher-end A100, H100, A800, and H800 chips were blocked. Despite being a downgraded option (around 2.9 TFLOPs/mm² density vs H100’s 19.4), the H20 found a ready market, with previous order estimates reaching $16 billion before the ban.
The restriction materialized despite conflicting signals just days earlier. Reports around April 10th suggested the Trump administration had paused the H20 ban following a meeting between Nvidia CEO Jensen Huang and the president. However, mounting political pressure and concerns surrounding the capabilities of Chinese AI firms like DeepSeek, reportedly using H20 chips, seemingly drove the restrictions forward.
Responding swiftly, Jensen Huang made a surprise visit to Beijing on April 17th. He met with China’s head of international trade promotion, Ren Hongbin, reportedly stating Nvidia hoped “to continue to cooperate with China,”. The Financial Times also reported Huang met DeepSeek founder Liang Wenfeng, potentially to explore options for new Nvidia chips compliant with the tightened US rules.
China’s Self-Sufficiency Drive Gains Momentum
The latest US restrictions are poised to accelerate China’s extensive efforts toward semiconductor independence. Even before this ban, Chinese AI firms were reportedly stockpiling H20 chips. The success of homegrown AI models like DeepSeek has created massive internal demand for capable hardware. This domestic push, backed by state funding like the $47.5 billion “Big Fund,” aims to reduce dependence on foreign technology.
Analysts like Patrick Moorhead suggested the ban forces Chinese companies toward domestic alternatives, stating to the NYT (as reported by Winbuzzer) that *“Chinese companies are just going to switch to Huawei.”* While the US continues to restrict access to cutting-edge manufacturing tools and clamp down on chip smuggling routes, Huawei’s Ascend 920 launch represents a significant domestic alternative entering the market at a critical juncture.
