What is DeepSeek's role in China's AI chip development?

DeepSeek, China's leading AI startup, has emerged as a key driver behind the country's efforts to develop domestic AI chips that can compete with global leaders like Nvidia. The company has advocated for a new data format, FP8, that it believes will help optimize the performance of Chinese-made AI processors.

How are Huawei and SMIC involved in China's AI chip push?

Huawei is planning to launch three new fabrication plants dedicated to producing its own AI processors, with two set to open in 2023. Meanwhile, SMIC, China's top semiconductor foundry, is doubling its capacity for manufacturing advanced 7-nanometer chips, which are a critical component for AI applications.

What is the goal of China's domestic AI chip development?

The overarching aim is for China to reduce its reliance on advanced AI processors from global leader Nvidia, which have been subject to US export restrictions in recent years. By aligning their chip development with DeepSeek's technology standards, Chinese firms hope to create a thriving domestic ecosystem that can eventually challenge Nvidia's dominance.

Home / Technology / China Accelerates Domestic AI Chip Production to Challenge Western Rivals

China Accelerates Domestic AI Chip Production to Challenge Western Rivals

27 Aug

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Summary

China plans to triple AI processor output by 2026
New Huawei-dedicated chip plants to launch in 2023
Chinese firms racing to develop next-gen AI chips

China Accelerates Domestic AI Chip Production to Challenge Western Rivals

As of August 2025, China's chipmakers are making a concerted push to significantly boost the country's domestic production of artificial intelligence (AI) processors. According to industry sources, the goal is to triple the total output of these specialized chips by the year 2026.

A key part of this effort is the planned launch of three new fabrication plants dedicated to producing AI processors for tech giant Huawei. Two of these facilities are scheduled to begin operations next year, while one is set to start production as soon as the end of 2022. Once fully ramped up, the combined capacity of these new plants could exceed the current total output of similar lines at China's leading semiconductor foundry, SMIC.

Alongside the Huawei-focused facilities, SMIC itself is also planning to double its capacity for manufacturing 7-nanometer chips—the most advanced chips currently mass-produced in China. Huawei is currently SMIC's largest customer for these advanced processor lines.

This surge in domestic AI chip production is being driven by a race among smaller Chinese semiconductor firms, such as Cambricon, MetaX, and Biren, to develop the next generation of AI-optimized chips. These companies are aiming to create chips that can better support the AI models and standards being pushed by DeepSeek, China's leading AI startup.

The goal is to reduce China's reliance on advanced AI processors from global leader Nvidia, which have been subject to export restrictions by the United States in recent years. By aligning their chip development with DeepSeek's technology, Chinese firms hope to create a thriving domestic ecosystem that can eventually challenge Nvidia's global dominance.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.