According to the Financial Times, China is preparing to triple its AI chip production capacity by 2026. The move is part of Beijing’s strategy to reduce its reliance on the United States—particularly on Nvidia—and to achieve greater self-sufficiency in semiconductor technology.
A central role in this plan belongs to Huawei, which aims to launch a dedicated AI chip manufacturing facility by the end of 2025. Two additional plants are expected to come online in 2026. While these factories will produce chips primarily for Huawei, the company is not expected to own or directly operate them.
The combined output of these new facilities could potentially surpass the current production capacity of SMIC, China’s largest chipmaker. Meanwhile, SMIC itself plans to double its 7-nanometer output by 2026, with Huawei expected to remain its biggest customer.
Beyond capacity expansion, China is also developing technological alternatives to U.S. chips. To navigate export restrictions, local developers are exploring FP8 formats, which trade off precision for efficiency. DeepSeek, Cambricon, and Huawei are among the companies leading these efforts.
China is also preparing to challenge foreign suppliers in memory chips, a crucial component for AI systems. Domestic manufacturer CXMT plans to roll out HBM3 memory chips in 2026.
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