BEIJING: China’s chipmakers are reportedly working to triple their domestic production of artificial intelligence (AI) chips by 2026 as part of a strategic push to reduce the nation’s reliance on U.S. technology, particularly from market leader Nvidia. According to a Financial Times report, this ambitious goal is being spearheaded by a significant expansion of production facilities, with tech giant Huawei at the forefront.
Huawei’s Secretive Chip Plants
Sources familiar with the matter revealed that Huawei plans to begin production at a new plant dedicated to manufacturing AI chips by the end of 2025. Two more facilities are slated to become operational in 2026. These plants are being built to specifically support Huawei, though their ownership structure remains unclear. The move comes despite Huawei’s official statement to the Financial Times denying it has plans for its own manufacturing plants.
The combined output from these three new facilities is expected to surpass the current production capacity of China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC). In a parallel effort, SMIC itself plans to double its manufacturing capacity for 7nm chips next year, with Huawei serving as its largest customer.
The AI Chip War Intensifies
Beijing is accelerating its work on domestic AI chips as it seeks to develop processors that can rival the performance of Nvidia’s China-specific H20 chips, which have been subject to U.S. export restrictions. The government has expressed security concerns over the use of foreign-designed chips, fueling the drive toward technological self-sufficiency.
This national push is a direct response to the ongoing U.S. sanctions, which have aimed to limit China’s access to advanced semiconductor technology. Despite these restrictions, a November Reuters report noted that Huawei had planned to begin mass-producing its most advanced AI chip in the first quarter of 2025, demonstrating the country’s resilience in the face of U.S. pressure.