Huawei CEO admits chips lag US despite $25B annual R&D spend

Huawei CEO Ren Zhengfei has publicly acknowledged that the company’s chips lag one generation behind U.S. competitors, marking the first official comments from Huawei leadership about their advanced chip manufacturing capabilities since U.S. export controls began in 2019. Despite this technological gap, Ren revealed that Huawei is deploying alternative strategies like cluster computing and mathematical optimization to bridge performance differences, while investing $25 billion annually in research and development.

What you should know: Huawei is compensating for its chip technology deficit through innovative workaround solutions rather than direct competition.

• The company uses “mathematics to supplement physics, non-Moore’s law to supplement Moore’s law and cluster computing to supplement single chips” to achieve practical performance results.
• Cluster computing allows multiple computers to work together, effectively multiplying processing power without requiring the most advanced individual chips.
• Huawei invests 180 billion yuan ($25.07 billion) annually in research and development to maintain competitiveness.

In plain English: Moore’s law refers to the traditional pattern of computer chips doubling in power roughly every two years. When Ren mentions “non-Moore’s law” approaches, he’s describing alternative methods to improve performance without necessarily making individual chips more powerful—like using smarter software, better algorithms, or connecting multiple computers together.

The big picture: U.S. export controls have forced Chinese tech giants to develop creative alternatives to cutting-edge semiconductor technology, potentially reshaping how AI computing is approached globally.

• Since 2019, Huawei has been blocked from accessing high-end chips and manufacturing equipment from U.S. suppliers.
• The company has pivoted to marketing its Ascend series AI chips as domestic competitors to Nvidia’s offerings in the Chinese market.
• The U.S. Commerce Department recently declared that using Ascend chips would violate export controls.

What they’re saying: Ren downplayed Huawei’s achievements while acknowledging the technological reality his company faces.

• “The United States has exaggerated Huawei’s achievements. Huawei is not that great. We have to work hard to reach their evaluation,” Ren said in the People’s Daily interview.
• “Our single chip is still behind the U.S. by a generation,” he admitted, while emphasizing the company’s mathematical and clustering approaches to performance improvement.
• Ren positioned Huawei as “just one of many Chinese chipmakers,” suggesting a broader industry effort rather than singular dominance.

Why this matters: Huawei’s candid admission reveals both the effectiveness of U.S. tech restrictions and the potential for alternative computing architectures to challenge traditional semiconductor leadership.

• The acknowledgment provides rare transparency into how Chinese tech companies are adapting to geopolitical constraints on technology access.
• Huawei’s focus on compound chips and cluster computing could influence broader industry approaches to AI processing, particularly in markets with limited access to cutting-edge semiconductors.