China’s Chip Industry Is On The Rise
China's chip industry continues to boost production as the communist country seeks to become more self-sufficient for its burgeoning artificial intelligence industry.
Sean Moran · Sep 26, 2026 · 6 min read
China’s chip industry continues to boost production as the communist country seeks to become more self-sufficient for its burgeoning artificial intelligence industry.
Chinese companies have scaled up their production of AI chips as the country aims to become less reliant on Western AI chips. Chinese government officials and industry executives said increasing its AI hardware industry could help it become more resilient in the face of American export controls.
However, experts tell the Daily Caller News Foundation that Chinese hardware production remains limited and that policymakers could explore options to limit Chinese chip production.
Chinese tech conglomerate Huawei cannot produce enough AI chips to meet the country’s demand and is limiting overseas sales, rotating chairman Eric Xu said in mid-September, according to Reuters. Xu said the company’s Ascend 950DT AI chip had produced good results and expects many Chinese AI developers to train their models using the chip in 2027, per the outlet.
The Huawei rotating chairman tied its desire to increase its domestic chip production to China’s national goal of reducing its reliance on foreign technology, such as Nvidia’s AI chips.
“We cannot accept a destiny where we cannot control our fate being determined by others in terms of willingness to sell chips to China or not,” Xu remarked, per Reuters.
“No matter if it’s for the Chinese government, industry in China, or for Huawei, it is certainly the way forward to try to push for full self-sufficiency for chips,” he added.
Chinese President Xi Jinping emphasized “self-reliance” and creating an “autonomously controllable” AI hardware and software ecosystem at an April 2025 Politburo meeting on artificial intelligence, according to the RAND Corporation.
China’s plan to have a flourishing domestic chip industry goes back to 2014, when it established the state-owned National Integrated Circuit Industry Investment Fund, commonly known as the “Big Fund,” to increase Chinese semiconductor manufacturing, according to the Wall Street Journal.