China’s Huawei is slowing production of its Mate 60 phones amid rising demand for its artificial intelligence chips, sources say. The company uses the same facility to manufacture both Ascend AI chips and the Kirin chips used in the phones, and output at the site has been limited by a low yield rate, the sources note.
They added that Huawei hopes the shift is temporary and that full production can resume if it is able to improve the yield rate of usable chips per wafer.
The move to slow production comes as Huawei topped smartphone sales in China for the first time in over three years. Meanwhile, it is recovering from U.S. sanctions in 2019 that limited its access to chipmaking tools.
It also highlights the effects of U.S. restrictions on the sale of AI processing chips to China. Nvidia previously enjoyed 90% market share before limits in October increased Chinese consumer interest in domestic options.
