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Comment by zmmmmm | Hacker News Reader

Curious what the fundamental limit on Huawei's capacity is. China has shown if nothing else they know how to scale when they want to. If it came down to just building more of what they know how to do, it would be happening. Is there more to it?

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Their yields on high performance chips that could do training is really bad, and they aren’t getting more of the outdated ASML machines that they could use to scale up even with bad yields. It will still take China a few years or a decade to build out the tech needed to fab high performance chips economically on their own.

Can't they use GlobalFoundries, Intel or TSMC in addition to their own fabs?

Chinese companies are effectively embargoed from using them for <14nm.

Sounds like an invasion of Taiwan could fix that problem for them.

No, Taiwan has to import the machines, the spare parts, and even some of the raw materials from western firms. If China invaded Taiwan, they might get some engineers, and maybe some designs they had no hope of implementing anytime soon. The fans, if they survived, wouldn’t be very useful. There is a reason the west doesn’t tell China adjacent countries that they can’t fab due to risk of invasion.

And, “TSMC and ASML, currently, the only supplier of tools that could make cutting-edge 2nm chips, have added a ‘kill switch’ that will disable TSMC’s EUV machines remotely. According to Bloomberg.”

https://www.tomshardware.com/tech-industry/tsmcs-euv-machine...

If you had physicial access to the machine, you could disable that feature. It would take some work since it must be baked into binaries, but far easier than creating a new EUB machine from scratch, I presume.

They can already make chips economically. Yields are worse than TSCM but good enough since they no longer need to pay the "Qualcomm tax". Huawei's phones are profitable. The issue is rather that Chinese capacity comes from a low quantity, and scaling capacity while simultaneously indigineousizing parts takes time — years. Foreign capacity was too good and too cheap so they never succeeded in scaling capacity, because the demand for Chinese fabs wasn't there. Now the demand for domestic capacity is there and they're scaling like crazy, like 100-200% growth per year. But demand still far outpaces capacity. Fabs are hard to build. You need many more years of 200% growth to even approach the demand.

And yes, I made use of emdash. It's a legit grammar tool. Sue me.

They can make chips economically or they can make high performance chips. They just can’t do both at the same time yet.

The chip supply chain in the west is under heavy lock and key and impossible to reverse engineer, so they have to develop all from scratch. And that’s what they are doing, it will just take some time.

The production capacity constraint seems to come from SMIC who make the Ascend processors for Huawei. Huawei's memory comes from CXMT who seem to have plenty of capacity, with Apple looking to buy memory from them. Huawei then combines processors and memory into chiplets similar to what NVIDIA does with their GPUs.

The reason SMIC are capacity constrained is at least in part because they've been blocked from buying ASML's EUV machines, and are therefore having to make do with previous generation lower resolution DUV machines. These DUV machines can be coaxed into making surprisingly competitive 5-7nm chips, but at the expense of using many more production steps ("multi patterning") which limits productivity.

Huawei chips need advanced 3d packaging in order to keep up. Since the process is too complex the yield is still bad.

Not to mention there is a lot of demand from various factors, not deepseek only. Huawei itself is a major consumer.

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