Huawei regains power in Chinese server sector due to AI chips demand: Report

Huawei has started reclaiming its growth and influence in Chinese server business due to increasing demands for its AI chips. The firm is once again coming into power for its server business and pushing back its rivals like Digital China Group.

A few industry analysts reported that Huawei is recovering in its server business despite being chained in U.S. sanctions for years. The credit goes to the heavy demand for the company’s AI chips over other alternatives in the home ground.

The Chinese OEM’s server business depends on two chips: Kunpeng for common servers and Ascend for AI products. Many computer developers like Talkweb, Huakun, XFusion, and more extended their hands to Huawei, giving it strength.

This has ultimately impacted the growth of other tech players in the market. Shenzhen Stock Exchange listing of firms like Digital China Group suddenly dropped by 10% from their daily limit this week and continues to remain down.

Huawei on the other hand, is expected to step into the Chinese server sector as a major assembler rather than being a component (like AI chips) supplier. Although the company has not decided any such adjustments to its business so far.

But if true, this move by the phone maker could shake the performance of other companies, making them just a distributor. Digital China Group is one example that teamed up with telecoms to offer effective server facilities to its customers.

Flashback

Back in 2018, Digital China joined forces with Huawei and initiated its ‘Greater Huawei’ scheme to act as a global distributor for the company. Some major products like Kuntai run on Kunpeng and Ascend chips.

Things drifted apart when Huawei faced U.S. sanctions in 2019, which made it dispose of its server subsidiary since it couldn’t purchase the Intel x86 chips.

Digital China says Kunpeng and Ascend products only have 3% of its total revenue. But Huawei has gradually stepped on the progress path and may rise back in this sector.

Ascend 910B AI chip demand has helped the company to turn back into its progressive mode. As said by a Huawei executive, the chip is far more efficient and reliable than its competitor – Nvidia A100.

Constant U.S. pressure is another reason that Chinese company turned their faces towards native products rather than relying on foreign ones.

|| Source – SCMP ||