Jakarta, CNBC Indonesia – The Joe Biden administration’s ban on chip exports has actually made local Chinese companies make big profits. Baidu, one of the Bamboo Curtain Country’s leading AI companies, started ordering AI chips from Huawei this year.
This is a sign that pressure from the US is actually pushing up Huawei’s income, because it is an alternative to Nvidia, which has been the supplier of AI chips to China.
One source said Baidu placed the order in August. This order comes as the US government begins to tighten restrictions on exports of chips and chip equipment to China, including those of US chip giant Nvidia.
Baidu ordered 1,600 Huawei Technologies’ Ascend AI 910B chips, which were developed by the Chinese company as an alternative to Nvidia’s A100 chips. According to sources told Reuters, the order is for 200 servers.
In October, Huawei had shipped more than 60% of orders, or about 1,000 chips, to Baidu.
Another source said that the total value of Baidur’s order was around 450 million yuan (Rp. 966 billion), and Huawei would ship all the chips by the end of this year.
While the order is relatively small compared to the thousands of chips Baidu has previously ordered from Nvidia, the source said the amount is significant, as it shows how some companies may be moving away from US firms.
Baidu, along with Chinese peers such as Tencent and Alibaba, are known to be long-time clients of Nvidia. Baidu was not previously listed as a customer of Huawei’s AI chips.
While Huawei’s Ascend chip is still considered to be far behind Nvidia’s in terms of performance, first sources say it is the most advanced domestic option available in China.
“They ordered the 910B chip to prepare for a future where they may no longer be able to buy from Nvidia,” said the source, quoted from ReutersWednesday (8/11/2023).
Baidu and Huawei did not respond to requests for comment. Nvidia declined to comment.
Huawei Opportunities
Analysts predicted last month that the US restrictions would create an opportunity for Huawei to expand its US$7 billion home market. This company has been subject to US export controls since 2019.
Anais added that signs of technological progress for Huawei are seen as Beijing invests in the domestic semiconductor industry to help it catch up with overseas rivals and urges state-owned companies to replace foreign technology with domestic alternatives.
Huawei attracted global attention last August, when it unexpectedly launched a new cellphone that analysts said used an internally developed processor with advanced semiconductor technology.
In September, Reuters reported that Huawei’s in-house chip design unit, HiSilicon, had begun shipping newly developed Chinese-made processors for surveillance cameras to clients in 2023 in a sign of its comeback.
[Gambas:Video CNBC]
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