AI chip demand forces Huawei to slow smartphone production

Singapore/Hong Kong: Soaring appetite for Huawei’s artificial intelligence (AI) chips coupled with manufacturing constraints has forced the Chinese tech giant to prioritise AI and slow production for its premium Mate 60 phones, people familiar with the matter said.

Huawei uses one facility producing both its Ascend AI chips and the Kirin chips that power its rival to Apple’s iPhone, three people said, two of whom said output has been hamstrung by a low yield rate – a proxy for production quality.

But a global race for AI functionality, amid a Sino-US technological standoff, has left Huawei second-placing its handsets just as the firm tops Chinese smartphone sales for the first time in more than three years.