The world's AI arms race is reshaping the global semiconductor supply chain. To reduce dependence on foreign computing, China is looking to triple its domestic AI accelerator output. According to anonymous sources close to the Financial Times, China has developed a plan to significantly scale its manufacturing operations. An entire semiconductor fabrication facility, with unknown wafer output and node specifications, is being dedicated to Huawei for the production of its Ascend accelerators, and is scheduled to start production by the end of the year. SMIC, China's premier semiconductor manufacturer, has been supporting Huawei's efforts, but it appears that Huawei has decided to initiate its own independent production with SMIC's assistance.

We reported earlier that, out of frustration with SMIC's low output capacity, Huawei has secured the entire silicon production process , from sourcing materials and chemicals to wafer fab equipment and chip-making equipment, as well as actual chip design. A few companies, all backed by Huawei with funding and research, are the backbone of this operation. SiCarrier, which we reported on back in March , supplies optical and X-ray inspection tools, atomic force microscopes, and alignment systems for metrology; gas-based and atomic layer deposition tools for film coating; plasma etchers for patterning; rapid thermal processors for material tuning; and electrical testing platforms for reliability screening. SwaySure and Fujian Jinhua supply memory chips, Si'En and Pehgjin supply power chips, and PWX and PST deal with logic.