China targets 5x increase in advanced chip output to fuel AI ambitions despite equipment constraints

China to increase leading-edge chip output by 5x in two years, report claims -- aims to lift 7nm and 5nm production to 100,000 wafers per month, targeting half a million monthly by 2030

China's leading chipmakers are working hard to increase the output of chips made using leading-edge process technologies by five times in two years to satisfy the demand of the domestic AI sector, reports Nikkei. This is going to be particularly hard to achieve given that China-based chipmakers do not have access to leading-edge tools from American, Japanese, and European companies. The country aims to lift production of chips using 7nm- and 5nm-class fabrication technologies from below 20,000 wafer starts per month today to roughly 100,000 within one to two years, according to Nikkei. The longer-term plan includes increasing output of semiconductors produced on leading-edge nodes with an additional 500,000 wafer starts per month by 2030, Nikkei reports, citing sources familiar with the matter. For now, the only company in China capable of making chips on 7nm-class manufacturing processes is Semiconductor Manufacturing International Corp. (SMIC). SMIC has been gradually expanding its leading-edge manufacturing footprint across Shanghai, Shenzhen, and Beijing fabs for years, according to SemiAnalysis, which models that the company was on track to approach roughly 50,000 wafer starts per month on advanced production nodes in 2025. The ramp has been supported by its ongoing ability to procure wafer fabrication equipment from foreign companies despite sanctions, as well as by the limited impact of export controls and their enforcement. If the 50,000-wafer starts per month figure is correct, then doubling that number to 100,000 within a couple of years might seem like a realistic plan as long as the company has the right equipment and could put it into production. However, this is not the case. Zhao Haijun, co-CEO of SMIC, recently complained that some tools the company had procured will not be put to use this year as the foundry has troubles procuring other equipment. "However, due to the impact of external factors, the company has procured some key equipment in advance, while the supporting equipment may not be purchased yet," said Zhao Haijun during a conference call with financial analysts and investors. "This timing difference has brought an even situation that the procured equipment may not be able to form production lines this year." Although SMIC cannot use some of its (presumably) advanced tools, it expects to continue adding capacity, though not necessarily to its advanced product lines, but rather to those producing chips on trailing nodes. "Based on the current situation, it is estimated that by the end of this year, the increase in monthly capacity will be around 40,000 12-inch equivalent wafers compared to the end of last year," Zhao Hauijun said. China's second-largest contract chipmaker, Hua Hong Semiconductor, historically focused on mature nodes, but has now joined the push into advanced logic manufacturing under pressure from central and regional authorities, and is now reportedly ramping its 28nm and 22nm-capable capacities. Huawei has provided technical assistance to support this transition, according to Nikkei. Beyond these two major foundries, Huawei-linked entities such as PengXinWei and Dongguan Guangmao Technologies are building out pilot lines and development capacity, including efforts targeting nodes more advanced than 10nm. When it comes to 22nm/28nm nodes and below, UBS estimates that China's existing capabilities are around 30,000 - 50,000 wafer starts per month, which suggests that SMIC's 7nm-capable production lines produce considerably fewer wafers per month than that. At the same time, UBS seems to be optimistic about China's ability to boost its 22nm/28nm and below capacities in the coming years. "Our industry discussions suggest the combined capacity expansion of multiple 'advanced' fabs could be 50K - 60K wpm or even higher in 2026E from 30K - 50K wpm in 2025," a recent UBS note for clients reads. "Our prior industry discussions suggested China targets to reach 150K -160K wpm advanced note capacity by end-2027." Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Top Chinese chipmakers plan to boost advanced chip output, Nikkei reports

Feb 25 (Reuters) - China's top chipmakers, including SMIC and Hua Hong Semiconductor, are aiming to boost their output of advanced semiconductors to meet burgeoning artificial intelligence demand, Nikkei said on Wednesday citing sources. Semiconductor Manufacturing International Co (SMIC), Hua Hong and several Huawei-linked chipmakers are expanding or aiming to start production of chips with the most advanced technology available, including on the 7-nanometer (nm) or even 5-nm performance level, Nikkei said. China is aiming to boost its output of relatively advanced chips to 100,000 wafers in one to two years, from less than 20,000 currently, while also setting a more aggressive target of adding an additional 500,000 wafers of capacity by 2030, the Japanese newspaper said citing sources. (Reporting by Sameer Manekar in Bengaluru; Editing by Jonathan Ananda)