China Taps SMIC, Hua Hong to Double Advanced Chip Output for AI

Edgen Stock

·Feb 28 2026, 00:40

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Key Takeaways

China has launched a major state-backed initiative to double its domestic production of advanced semiconductors. This strategic push aims to meet surging demand from the country's artificial intelligence sector and reduce reliance on foreign technology.

Top Chinese foundries, including SMIC and Hua Hong Semiconductor, are expanding or initiating production of advanced chips.
The focus is on increasing capacity for 5-nanometer and 7-nanometer process technologies to power domestic AI developers.
This national-level effort proceeds despite ongoing US industry restrictions, signaling a drive for technological self-sufficiency.

China Targets Doubled Advanced Chip Output for AI Sector

China has initiated a significant national effort to double its production of advanced semiconductors, mobilizing its top foundries to secure the supply chain for its booming artificial intelligence sector. Backed by government support, leading manufacturers including Semiconductor Manufacturing International Corp. (SMIC) and Hua Hong Semiconductor are at the forefront of this strategic push. The initiative also involves several chip manufacturers associated with Huawei, all tasked with expanding domestic capacity to meet the continuously growing demand for national AI computing infrastructure.

SMIC and Hua Hong Ramp Up 5nm and 7nm Production

To achieve this goal, SMIC and Hua Hong are actively expanding or beginning new production lines for chips using 7-nanometer and 5-nanometer processes. This move directly addresses the surging demand from domestic AI chip designers who require powerful processors for their systems. The expansion proceeds despite ongoing US industry restrictions, highlighting China's drive for technological self-sufficiency. As of market data from February 27, 2026, SMIC's Hong Kong-listed stock (00981.HK) gained 0.592%, while shares of Hua Hong Semi (01347.HK) declined by 1.124%.