China Targets Tripling AI Chip Production, Cutting Reliance on Nvidia

China’s semiconductor makers are pushing to triple the country’s output of artificial intelligence chips by 2026 in a bid to reduce reliance on U.S. giant Nvidia, the Financial Times reported on Wednesday.

Huawei is expected to begin production at a dedicated AI chip facility by the end of this year, with two additional plants slated to launch in 2026, according to people familiar with the plans. While the plants are designed to serve Huawei, their ultimate ownership remains unclear. The company told the FT it has no plans to operate its own chip plants directly.

The combined output of the three facilities could exceed the current capacity of similar lines at China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC). SMIC, meanwhile, plans to double its 7-nanometre chip capacity next year, with Huawei as its biggest customer.

The push comes as Beijing accelerates efforts to build up domestic AI chip supply, with local firms developing processors intended to rival Nvidia’s H20, a China-specific model that has raised security concerns with regulators.

Huawei and SMIC did not immediately respond to Reuters requests for comment.