GoKawiilHuawei expects revenue from its AI processors to reach roughly $12 billion in 2026, up from $7.5 billion last year. The projection, based on orders already received from major Chinese technology firms including Alibaba, ByteDance, and Tencent, would represent at least 60% year-over-year growth and position Huawei as the dominant supplier in a domestic AI chip market that Morgan Stanley estimates could reach $67 billion by 2030. The surge has coincided with Nvidia CEO Jensen Huang confirming that Nvidia's share of the Chinese AI accelerator market has collapsed to zero percent.
These numbers describe a market that has bifurcated with unusual speed. Just 18 months ago, Nvidia supplied the vast majority of AI training and inference silicon used by Chinese cloud providers. Today, Huawei's Ascend 950PR is the primary procurement target for China's largest tech companies, and a training-focused successor named the 950DT is scheduled for Q4 this year.
The impact of DeepSeek V4
This raging demand can be largely attributed to the release of DeepSeek’s V4 LLM in April, which has been optimized specifically for Huawei's Ascend architecture and its CANN software framework rather than for Nvidia's CUDA ecosystem. Huawei engineers, per reporting from South China Morning Post, are said to have collaborated directly with DeepSeek ahead of the model’s launch, and the company confirmed that its full Ascend SuperNode product line was adapted for V4 inference on day one. Alibaba Cloud and Tencent Cloud both deployed V4 services within hours of release.
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The 950PR is currently the only Chinese-made AI processor that supports FP8, a compressed numerical format that allows more operations per second and lowers per-query costs. V4 uses a Mixture-of-Experts architecture with up to 1 trillion total parameters but activates only around 37 billion per inference pass. That favors inference-efficient hardware, which plays to the 950PR's strengths over its limitations in raw training throughput.
DeepSeek gave Huawei early optimization access, but didn’t extend the same to Nvidia or AMD. While V4's open weights are released in standard formats compatible with CUDA-based frameworks, DeepSeek's own infrastructure runs on Huawei Ascend silicon. The collaboration has pulled forward procurement timelines across the Chinese cloud industry, and chip prices for the 950PR have reportedly risen by about 20% as a result of the demand.
SMIC capacity and production
Huawei's ability to fill those orders depends on SMIC, China's leading foundry. SMIC manufactures the 950PR on its N+3 process, a 7nm-class node built without EUV lithography. Huawei is said to be targeting production of roughly 750,000 950PR units this year, with full-scale shipments expected in the second half following samples that were shipped to customers in January, but that figure is expected to fall short of demand.
Meanwhile, SMIC has been working on expanding its advanced-node capacity for more than a year. The goal is a five-fold increase over a period of two years that’ll lift 7nm and 5nm production to 100,000 wafers per month and half a million by 2030. In addition, the combined capacity for 22nm and below could rise from 30,000-50,000 wafer starts per month in 2025 to 50,000-60,000 or higher this year. Huawei is adding two dedicated fabrication plants, though ownership structures remain unclear. Once fully operational, those facilities could exceed the current output of comparable lines at SMIC.
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