China Aims to Triple AI Chip Production by 2026

China Aims to Triple AI Chip Production by 2026
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China is aiming to triple its domestic production of AI processor chips by 2026, Anadolu Agency revealed citing a report by the Financial Times. The ambitious goal is driven by the country’s efforts to increase self-reliance in the semiconductor sector amid ongoing geopolitical tensions with the United States.

The plan involves bringing new fabrication plants online, with one dedicated to manufacturing Huawei’s AI chips expected to start operations by the end of this year. Two more facilities are set to open in 2026. Once fully operational, the output from these three new plants could exceed the total existing production of similar lines at Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker.

SMIC itself is also reportedly planning to double its capacity for producing advanced 7-nanometer chips next year, a move that would provide more supply for other domestic chip designers like Cambricon and MetaX.

The push for increased production is part of a broader strategy to create a self-sustaining AI ecosystem in China. A key element of this is the development of AI chips that are optimized for a standard promoted by DeepSeek, a leading Chinese AI start-up. DeepSeek recently released a new model that uses an FP8 data format, designed to work efficiently with Chinese-made chips. An unnamed Chinese chipmaker executive stated that if this domestic ecosystem succeeds, it could fill the gap for less advanced hardware capabilities and become an “even more significant DeepSeek moment.”