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The article doesn’t really go into it but what’s a typical yield for chips like that? That’s great they’re on a smaller dye but if you’re trashing half of them it seems you’re not quite there yet.
It seems pretty poor, especially for 2023. This article from four years ago has TSMC touting an 80% yield rate on their new-at-the-time 5nm process. Still, the fact that Huawei is able to produce 7nm parts at all is something of a victory. Huawei is probably around five years behind TSMC at this point but may be able to close that gap over time.
If you're trashing half of them, that's just means fabrication is more expensive. This seems to be an acceptable cost for Huawei, and I imagine SMIC will get subsidies to offset the cost in the short term. The important part is that SMIC can now produce commercially viable 7nm chips domestically, and they're only going to get better at doing it going forward.