Huawei AI Chip Demand Surges After DeepSeek V4 Launch
Demand for Huawei’s Ascend 950 artificial intelligence chips has risen sharply following the release of DeepSeek’s V4 model. The new system runs on Huawei’s hardware, prompting major Chinese technology firms to accelerate procurement efforts.
Leading companies, including ByteDance, Alibaba, and Tencent, have approached Huawei to secure additional chip supplies. Sources familiar with the discussions indicated that firms involved in cloud computing and GPU rental services are also competing to place orders. This surge reflects growing reliance on domestic semiconductor solutions.
DeepSeek V4 Drives Domestic Shift
The release of DeepSeek V4 has significantly increased demand for Chinese-made AI infrastructure. The model has been optimised specifically for Huawei’s chips, signalling a shift away from dependence on American semiconductor providers.
This development aligns with Beijing’s broader objective to strengthen domestic technological capabilities. As US export restrictions continue to limit access to advanced processors, Chinese firms are increasingly turning to local alternatives.
Huawei confirmed that its Ascend SuperNode systems, built on the 950 series, fully support DeepSeek V4. These systems have been adapted for inference tasks, enabling efficient processing of AI workloads. As a result, the compatibility between software and hardware has strengthened Huawei’s position in the market.
Competitive Performance and Market Position
The Ascend 950PR chip represents a significant advancement for Huawei. It outperforms Nvidia’s H20 processor, which had been the most powerful chip available to China before import restrictions were tightened. However, it still lags behind Nvidia’s more advanced H200 chip, which remains entangled in regulatory uncertainty.
Despite this gap, Huawei has gained a competitive edge due to supply limitations affecting foreign chips. The inability to ship certain high-end processors to China has created an opportunity for domestic manufacturers to expand their presence.
Moreover, the 950PR supports advanced computational techniques that allow more efficient processing at lower costs. This capability makes it particularly attractive for large-scale AI applications.
Rapid Adoption Across Cloud Platforms
Chinese cloud providers have quickly integrated DeepSeek V4 into their platforms. Alibaba Cloud and Tencent Cloud launched services for the model on the same day as its release. This rapid deployment has enabled widespread access for developers and businesses.
Consequently, the number of AI queries processed across these platforms has increased significantly. This growth has further intensified demand for Huawei’s chips, as more computing power is required to support expanding workloads.
Supply Constraints and Future Outlook
Despite strong demand, supply constraints remain a critical challenge. Production of the Ascend 950 series is expected to fall short of market needs, largely due to restrictions on advanced chipmaking equipment.
Huawei plans to manufacture approximately 750,000 units of the 950PR this year. While mass production began in April, full-scale shipments are expected to ramp up in the latter half of 2026.
DeepSeek has indicated that pricing for its V4-Pro model could decline once chip production increases. However, constraints are likely to persist until manufacturing capacity expands further.
The ongoing imbalance between supply and demand highlights the pressures facing China’s semiconductor industry. It also underscores the strategic importance of developing independent AI hardware capabilities in an increasingly competitive global landscape.
With inputs from Reuters
