China's AI Chips and Export Controls: Ascend, SMIC — 2026-09-08
DeepSeek has placed a massive order for 160,000 Huawei Ascend 950DT chips, signaling a decisive shift away from Nvidia’s H20 GPUs despite performance trade-offs. Meanwhile, Huawei is aggressively ramping up Ascend production to bypass US export controls, utilizing novel architectures to double output, while Chinese domestic AI chip market share approaches 90%.
China's AI Chips and Export Controls: Ascend, SMIC — 2026-09-08
Top developments
DeepSeek Orders 160,000 Huawei Ascend 950DT Chips
In a major blow to Nvidia's remaining foothold in China, DeepSeek has reportedly ordered 160,000 units of Huawei’s Ascend 950DT chips. This decision comes despite the Ascend 950DT offering roughly one-quarter of the performance of Nvidia’s H20 GPUs and involving a year-long delivery wait. The move underscores Beijing's push for self-reliance and Huawei’s growing dominance in the domestic AI infrastructure market.
Huawei Doubles Ascend Output Using "LogicFolding"
Huawei is preparing to double its production of the Ascend 910C AI chip to 600,000 units in 2026. To achieve this while circumventing US export restrictions on advanced lithography equipment, Huawei is employing a new "LogicFolding" architecture. This initiative is part of a broader national effort to secure advanced semiconductor production capabilities independent of Western supply chains.
Domestic AI Chip Market Share Nears 90%
Analysts suggest that China’s homegrown AI accelerators are on track to supply 90% of the country's domestic market in 2026. Huawei and Cambricon are identified as the primary beneficiaries of this shift, which sees companies moving away from Nvidia and AMD. This trend highlights the effectiveness of export controls in accelerating China's domestic substitution efforts.
US Targets Cloud GPU Access Loophole
US lawmakers are increasingly focused on closing loopholes that allow Chinese firms to access advanced Nvidia computing power via overseas cloud services. Recent reports indicate that Chinese AI companies have accessed restricted hardware through cloud providers, prompting Washington to consider stricter regulations on cloud access. This regulatory tightening aims to complement existing hardware export bans.
Local view
Local media and financial analysts are noting a divergence between the booming narrative of domestic chip production and the harsh realities of capital markets. On September 7, Moore Threads, a leading domestic GPU maker, saw its stock hit a limit-down drop following its lock-up expiration. Reports from Huxiu highlight that while revenue figures for companies like Cambricon are surging (with Q1 2026 revenue up 160%), the industry faces significant yield challenges at SMIC and limited HBM supply, causing investor skepticism about the sustainability of these valuations.
Context & numbers
- Cambricon Financials: Cambricon reported H1 2026 revenue of RMB 5.996 billion and net profit of RMB 2.311 billion, reflecting strong demand for its MLU series accelerators.
- Huawei Revenue Projection: Huawei expects a 60% revenue growth from its AI chip division in 2026, potentially reaching $12 billion.
- Export Control Status: As of early September 2026, the US BIS maintains a case-by-case review policy for advanced chips like the Nvidia H200, but enforcement against cloud-based access remains a key focus area.
On the radar
- Q4 2026 Ascend 950DT Launch: Industry watchers are monitoring the official mass-production start of the Ascend 950DT, which is critical for fulfilling large orders like DeepSeek’s.
- SMIC Yield Improvements: Continued updates on SMIC’s 7nm yields will determine if the 600,000-unit Ascend target is realistic given HBM supply constraints.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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