FT pointed to China's readiness to race with the United States to produce AI chips

Chinese chip makers are aiming to triple the total production of AI processors in the country by 2026 in order to overtake the United States in the race. This was reported on August 27 by the Financial Times (FT) newspaper.

The article clarifies that one Huawei AI processor manufacturing plant is scheduled to start operating at the end of 2025, and two more in 2026.

"The combined capacity of these three new plants, after full commissioning, may exceed the current total capacity of similar lines at China's leading Semiconductor Manufacturing International Corporation (SMIC) plant," the material says.

In 2026, SMIC also plans to double its capacity to produce 7nm chips, the most advanced type of mass production in China, the article says.

"Currently, Huawei is the largest customer of SMIC processor lines, which means that smaller Chinese chip manufacturers such as Cambricon, MetaX and Biren can get much more production capacity, which will increase competition for the fast-growing Chinese market, which Nvidia has left due to the ban on exports to the United States," — it is emphasized in the material.

One of the leaders of the Chinese chip manufacturer, whom the newspaper spoke with, said that processors, against the background of export restrictions from the United States, would not be a problem for China for a long time, since their production in the country would begin next year.

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On August 10, the Financial Times newspaper reported on Nvidia and AMD's willingness to pay the United States 15% of the revenue from sales of their chips in China in order to obtain licenses for exporting semiconductors. Manufacturers will deduct this percentage to the United States authorities from Nvidia and AMD's MI308 chip models.

Bloomberg reported on August 12 that Chinese authorities urged local companies to refrain from using Nvidia's H20 processors, especially in the public sector. There is no direct ban on the use of H20 in China. Local technology companies want to get these processors that work well in artificial intelligence (AI) applications. However, the government's calls create difficulties for Nvidia, which is trying to compensate for losses from restrictions on chip sales to China.

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