Huawei Plans New Facilities as Beijing Accelerates AI Chip Push
China’s chipmakers are preparing to sharply increase production of artificial intelligence (AI) chips in 2026, according to a report by the Financial Times. The move highlights Beijing’s efforts to reduce reliance on US firm Nvidia, which dominates the global AI chip market.
Huawei is expected to begin production at a new AI chip plant by the end of 2025. Two more facilities are planned for 2026, though the ownership structure of these plants remains unclear. While the sites are reportedly designed to support Huawei, the company told the Financial Times that it has no current plans to operate its own chip plants.
If completed, the combined output of these facilities could exceed the current capacity of Semiconductor Manufacturing International Corporation (SMIC), China’s largest contract chipmaker.
SMIC Expands 7nm Production for Huawei
SMIC, which manufactures 7-nanometre chips with Huawei as its biggest customer, is also set to double its output capacity next year. This expansion underlines China’s broader strategy to strengthen domestic semiconductor production in the face of tightening US export restrictions.
Beijing is encouraging the development of AI processors that can compete with Nvidia’s China-special H20 chip. Officials have previously raised security concerns about relying heavily on foreign suppliers for advanced semiconductors.
Push Towards Advanced AI Chips
In November, Reuters reported that Huawei planned to start mass production of its most advanced AI chip in the first quarter of 2025. Despite facing challenges from US restrictions, the company has continued to expand its semiconductor capabilities.
China’s rapid investment in AI chipmaking reflects its determination to reduce external vulnerabilities while positioning itself as a stronger player in the global technology race.
with inputs from Reuters
