China's Chipmakers Set to Triple AI Chip Production by 2026

Chinese chipmakers aim to triple AI chip processor production by 2026. Semiconductor Manufacturing International Corp, a leading chipmaker, is expected to increase production of AI chips to meet growing demand. The company's products are sold globally, including in the US, Europe, and Asia.

Chinese chipmakers are set to significantly boost their AI chip processor production, aiming to triple their output by 2026. This strategic move is part of a broader effort to reduce dependence on Nvidia (NASDAQ:NVDA), according to reports from the Financial Times [1, 2].

Huawei, a major player in the AI chip market, plans to begin production at a dedicated AI chip facility by the end of 2025, with two additional sites scheduled to come online in 2026. These facilities are primarily intended to support Huawei’s AI chip requirements, although their precise ownership arrangements remain unclear. Huawei has stated it does not plan to operate its own standalone manufacturing plants [1, 2].

Semiconductor Manufacturing International Corporation (SMIC), China’s top chipmaker, is also ramping up its production capacity. SMIC plans to double its production of 7-nanometer chips in 2026, with Huawei expected to remain its largest customer for these advanced chips [1, 2].

The combined output from Huawei’s three potential AI chip plants is expected to surpass the current production capacity of similar lines at SMIC. This expansion is a significant step in China’s efforts to develop its domestic AI chip industry, which has been a focus of the Chinese government due to security concerns [1, 2].

Nvidia, the global leader in AI chip technology, has recently reported record results for the second quarter of 2025, with revenue of $46.7 billion and adjusted earnings per share of $1.05. However, shares slipped modestly in after-hours trading due to the data center division narrowly missing Wall Street forecasts [3].

The increasing focus on AI chips and the potential for an AI-driven growth slowdown have raised concerns among investors, leading to a slight market edge. The market is closely watching Nvidia’s next-generation product launches and the impact of recent export restrictions and U.S. policy shifts on its sales [3].

In conclusion, the planned expansion of AI chip production by Chinese chipmakers is a strategic response to reduce dependence on foreign technology and meet growing domestic demand. This move is expected to have significant implications for the global semiconductor industry and the AI chip market.

References:
[1] https://investorshub.advfn.com/market-news/article/15324/chinas-chip-industry-plans-to-triple-ai-chip-production-in-2026
[2] https://www.reuters.com/world/china/china-aims-triple-ai-chip-output-reducing-nvidias-dependency-ft-says-2025-08-27/
[3] https://finance.yahoo.com/news/markets-edge-over-ai-bubble-232730894.html