U.S. imposes restriction on employing Huawei's Ascend sophisticated computer chips
UNLEASHED INK:
The Cat and Mouse Game of Tech and Trade
ELAINE KURTENBACH Skirmishes persist in the tech-commerce battlefield between the United States and China, with Beijing zinging a salvo at the latest U.S. rule against the use of Huawei Technologies' Ascend computer chips globally. This sour bout comes amidst a ceasefire truce in the smoldering trade war between the two economic giants.
Relentlessly pressing forward, China fulfilled its pledge to roll back retaliatory measures imposed post-Trump's trade-war escalation. One notable action was the lifting of a blockade on U.S. exports of rare earth minerals, essential for the production of various advanced technologies.
Friction remains, with the U.S. Commerce Department's Bureau of Industry and Security escalating its stance on Huawei's Ascend semiconductors. Claiming that they utilize U.S. technology, these chips are now subject to U.S. export controls, prompting the Bureau to warn that their use may violate U.S. export regulations and may lead to enforcement action.
In response, China's Commerce Ministry fired back, remarking that the move threatened long-term cooperation between the two nations and urged the U.S. to rectify its "erroneous practices."
Huawei's Ascend chip is integral to China's mission of indigenously building edge-of-the-art computer chips and related technologies. Industry analysts contend that the embrace of this chip by China's DeepSeek AI project may pose a potential challenge for Nvidia against global AI market dominance.
Taking a swing at U.S. tariffs on Chinese steel and aluminum, Beijing expressed frustration as these tariff lifts were not granted after the accepted trade truce. She called for Washington to abandon the relic of Section 232 of the Trade Expansion Act of 1962, giving the U.S. President the power to impose tariffs on national security grounds.
In defiance, Trump applied the power to reimpose 25% tariffs on steel and aluminum that had previously been levied during his first term, upticking the existing 20% tariff meant to coerce China to clamp down on the illicit entry of fentanyl. Moreover, the 30% levy encompasses additional levies on China, some of which hark back to Trump's initial term and were retained by former President Joe Biden.
Fighting back, China slapped a 10% tariff on U.S. products during the 90-day negotiating period.
Cold War Triumphs and Fallouts
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Technological Odyssey: The Ascend Saga
Huawei's Ascend AI chips, including the Ascend 910, 910B, and upcoming 910c and 910d, reflect China's rapid progress in AI hardware development. First manufactured by Taiwan's TSMC, production was shifted to mainland China in response to U.S. export restrictions. Despite these obstacles, Huawei managed to develop the chips domestically, with the latest Ascend 910c expected to compete with Nvidia's H100 in terms of performance but at a fraction of the cost. This perseverance exemplifies China's stride in shrinking the AI chip divide with the U.S., with the assistance of fellow Chinese firms pushing chip design and manufacturing technologies, even reaching near 5nm fabrication processes, though lagging behind the leading-edge production like TSMC's 2nm node.
The Iron Fist: U.S. Export Controls and AI Tech
The U.S. government has intensified export controls over AI chips and associated technologies, primarily aiming to restrict China's access to advanced semiconductor technology. Export controls have expanded since October 2022, targeting additional countries and components, as well as establishing a three-tier system limiting chip access for 120 countries, including allies. However, these restrictions have faced criticism for being overly broad and counterproductive, potentially isolating U.S. companies from the global market and accelerating China's efforts to indigenously develop AI hardware capabilities. The Biden administration's AI Diffusion Rule, introduced in January 2025 to enforce these controls, was rescinded by the Department of Commerce in May 2025, due to concerns about stifling American innovation and harming diplomatic relations.
The Huawei Crackdown: A Worldwide Crusade
Despite the AI Diffusion Rule's rescission, the U.S. has persisted in strengthening export controls specifically targeting Huawei Ascend chips. In May 2025, the U.S. issued guidance warning that the use of Huawei Ascend chips anywhere in the world violates U.S. export regulations and poses various legal risks. This move exemplifies the U.S. effort to prevent the proliferation of Chinese AI chip technology globally, regarding these chips as being developed or produced in violation of U.S. export controls.
The Global AI Landscape: Strong divisions and shaky alliances
- Catalyst for Chinese AI Chip Development: U.S. export restrictions have inadvertently encouraged China to swiftly advance its own AI chip production capabilities and innovation across the semiconductor ecosystem. Chinese firms prioritize not only chip performance improvements but also cost-efficiency and innovative applications of less advanced chips to achieve competitive AI performance.
- Fragmented Global Market: The stringent export controls imposed by the U.S. and the crackdown on Huawei chips risk fragmenting the global AI hardware market. U.S. companies may lose access to major markets like China, while Chinese companies capture market share domestically and internationally with cost-effective alternatives.
- Strained Relationships: Export controls that restrict chip sales to numerous countries pose diplomatic and economic challenges, potentially straining U.S. relations with allies and trade partners, leading to policy reversals and modifications.
- Regulatory Complexities: Ensuring worldwide compliance with U.S. export directives concerning Huawei chips is a daunting task due to the complexity of global supply chains and the ability of Chinese firms to produce chips domestically, complicating attempts to check the spread of technology.
- Competing Innovation Dynamics: The U.S. seeks to tighten its lead in AI by maintaining advanced technology from adversaries, while China pursues self-reliance and competitiveness. This dynamic fosters a competitive AI chip landscape, with the potential for technological breakthroughs and geopolitical rivalry, affecting the speed and direction of future AI innovation worldwide.
- Microsoft's strategic maneuvers continue to shape the landscape of business in Seattle, as the world's most valuable company grapples with fluctuations in its share price.
- The global news arena has been abuzz with the technological odyssey centered on Huawei's Ascend AI chips, with China pushing for domestic production as U.S. export controls tighten.
- Amid the escalating tech-commerce battlefield between the United States and China, Seattle's Bastyr University is considering its future plans following the sale of its Kenmore campus, potentially impacting the technology and finance sectors of the region.
