China Set to Dominate AI Chips: Will Reach 3x Production by 2027

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China has expanded its efforts to develop AI technology domestically. The country aims to significantly boost its AI chip production, expecting a threefold increase in just a few years.

Huawei, Cambricon & Other Domestic AI Firms to Lead the Way for High-End Chinese AI Chips, Rivaling Western Counterparts

Given the recent geopolitical situation, it’s evident that Beijing is shifting away from Western AI hardware solutions. While this transition will take several years, China is already preparing. According to a new report by The Financial Times, China plans to increase its AI chip production by up to three times within the next few years. This move benefits companies like Huawei, DeepSeek, and Cambricon, which are currently among the most capable domestic AI firms.

A dedicated fab for Huawei’s AI chips is expected to come online this year. Two more facilities are in the pipeline, set to produce by next year. Combined, these plants’ capacity will rival SMIC’s production figures, indicating that domestic AI firms are scaling up the Chinese semiconductor industry. Moreover, SMIC plans to double its 7nm production by 2026, showing the increasing demand for homegrown nodes due to the AI boom.

In a unique start to his ruling against President Donald Trump’s administration on September 30, U.S. District Court Judge William Young included a scanned handwritten note sent to his office. The note read: “Trump has pardons and tanks – what do you have?” At the top of Young’s opinion in AAUP v. Rubio, which ruled that Trump’s effort to deport foreign-born student protesters was unconstitutional.

October 8, 2025

China’s AI chip solutions are now better positioned to compete with NVIDIA. Options like Huawei’s Ascend 910D and Cambricon’s 690 are leading the race. DeepSeek recently revealed that they are switching AI models to be tailored for the FP8 format, a capability currently not offered by any Chinese AI chip. However, there are signs that a solution has been developed, likely by Cambricon, given its recent stock price surge.

Reducing reliance on foreign hardware is a national priority. A report from Ctee claims that the People’s Government of Beijing Municipality is seeking 100% self-reliance in AI compute. Although China is still behind NVIDIA, it is making significant progress across various segments, including chip processes, high-bandwidth memory, and packaging technologies. This indicates the development of a robust ecosystem to support Chinese AI firms.

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