China’s leading chipmakers — including Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor — are moving to significantly expand production of advanced semiconductors to meet growing demand driven by artificial intelligence, according to a Nikkei report citing industry sources.
Push into 7nm and 5nm technology
SMIC, Hua Hong, and several Huawei-linked manufacturers are either expanding or preparing to launch production lines capable of producing chips at the 7-nanometer (nm) level — and in some cases targeting 5nm-class performance, the most advanced technology currently achievable domestically.
These process nodes are crucial for:
- AI training and inference chips
- High-performance computing
- Advanced smartphones
- Data center processors
Ambitious capacity targets
According to the report, China aims to increase its output of relatively advanced chips to 100,000 wafers per month within one to two years, up from fewer than 20,000 currently.
In the longer term, Beijing has reportedly set a goal of adding 500,000 wafers of additional capacity by 2030.
Strategic context
The expansion reflects China’s broader push for semiconductor self-sufficiency amid export controls and technology restrictions that have limited access to cutting-edge chipmaking equipment and advanced foreign chips.
With AI demand surging globally, domestic chip production has become a strategic priority for China’s technology sector. Increasing local capacity at 7nm and below would mark a significant step toward reducing reliance on overseas suppliers.
Industry observers note, however, that scaling advanced-node production remains technically challenging and capital intensive, especially given ongoing restrictions on access to extreme ultraviolet (EUV) lithography equipment.
Still, the aggressive expansion signals Beijing’s determination to narrow the technology gap and strengthen its domestic semiconductor ecosystem in the coming years.
