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China targets fivefold increase in advanced chip production for AI demand
Thursday, February 26, 2026 at 11:48 PM
Backed by the Chinese government, Huawei and SMIC are spearheading an initiative to increase the production of advanced semiconductor chips fivefold to satisfy domestic AI infrastructure demand.
Context
China is aggressively scaling its domestic semiconductor industry with a directive to increase advanced chip output fivefold within the next two years. Led by SMIC and backed by state-level support, the initiative aims to surge monthly production of 7nm and 5nm-class wafers from current levels of under 20,000 to 100,000 by 2027. This rapid expansion is designed to meet the massive demand for AI computing infrastructure, specifically powering Huawei’s next-generation Ascend AI processors and Kirin mobile chipsets.
The strategic push prioritizes technological self-reliance as U.S. export controls limit access to high-end Western equipment. SMIC is reportedly utilizing its advanced N+3 process to bridge the performance gap, while Hua Hong Semiconductor shifts capacity toward advanced nodes. Beijing’s longer-term roadmap targets an additional 500,000 wafers of capacity by 2030, solidifying SMIC’s position as the world’s third-largest foundry by revenue despite the lack of advanced lithography tools.
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