Despite stringent U.S. export controls aimed at limiting its access to advanced semiconductor technology, Chinese technology firm Huawei is on track for a substantial increase in chip revenue. Analysts project the company will reach approximately $12 billion in chip revenue by the end of 2026, a significant jump from $7.5 billion in 2025. This growth follows U.S. restrictions first imposed in 2019 and tightened by the Biden administration in subsequent years, which aimed to curb China's technological advancements, particularly in areas like artificial intelligence and military applications.
Following the 2023 export controls, China reportedly directed state agencies to prioritize purchases of Huawei hardware, chips, and mobile devices. Simultaneously, the company received over $1 billion in government grants. Huawei's annual reports show a significant increase in government grants, rising from 2.5 billion yuan (approximately $403 million) in 2021 to 7.3 billion yuan in 2023, although this dipped to 3.9 billion yuan in 2025. These investments coincide with the development of Huawei's Ascend 910B chip, designed to compete with Nvidia's high-end processors.
Huawei is also exploring new technological avenues, such as 'Tau scaling law,' which aims to improve chip efficiency by altering how electrical signals travel, rather than solely focusing on shrinking transistor sizes. Jensen Huang, CEO of Nvidia, has acknowledged Huawei as a formidable competitor, stating, "Huawei is the single most formidable technology company in China." He added that "They’ve conquered every market they’ve engaged in."
The U.S. Department of Commerce stated that the export controls were intended to restrict China's ability to acquire advanced computing chips and develop supercomputers, citing their use in advanced military systems and human rights abuses. However, some lawmakers argue that the controls have inadvertently pushed China to seek alternative production methods, potentially relying more on offshore manufacturing. Rep. John Moolenaar, R-Mich., suggested that Huawei's demand has led to an increased reliance on Taiwan for chip procurement, a situation he described as a "humiliation the CCP would prefer to avoid at all costs."
While debates continue regarding the actual performance of the Ascend 910B and other promised breakthroughs, U.S. officials maintain that American firms still hold a significant advantage in AI computing power, estimating around 75 percent of the global total. Bridget Bean, former executive director of the Cybersecurity and Infrastructure Security Agency (CISA), has expressed concern that China is rapidly closing the AI gap, warning of the potential risks associated with its AI models and cyber-biological weapons. She emphasized the critical need for continued U.S. innovation and the protection of advanced chip technology to preserve its global leadership.