has AI in its favor

During the first two months of 2026, China exported integrated circuits worth $43.3 billion, according to SCMPwhich represents an increase of 72.6% compared to the same period in 2025. This information comes directly from Chinese customs records, so it is presumably reliable. However, the most astonishing thing is that all of this country’s exports has grown by 21.8% during January and February, so it is evident that the semiconductor industry has been stimulated with much more intensity than other sectors.

This behavior largely responds to the very high demand for chips for artificial intelligence (AI) that extends across a good part of the planet. The US and its allies have worked hard over the past five years to prevent China from achieving the photolithography equipment of the Dutch company ASML that it needs to manufacture cutting-edge chips, which has caused the country led by Xi Jinping to be forced to achieve self-sufficiency throughout the semiconductor production chain.

Domestic demand has stimulated the growth of the Chinese chip industry in recent years, but the figures I have collected in the first paragraph of this article show that external demand is also very strong. Huawei, Moore Threads either Cambricon Technologies They are some of the Chinese companies that already have AI GPUs with competitive features, so it is reasonable to assume that these chips are being acquired by foreign companies that are most likely having difficulties accessing the solutions that the Taiwanese company TSMC produces for NVIDIA or AMD.

Mature chips remain one of the pillars of the Chinese industry

SMIC (Semiconductor Manufacturing International Corp), the producer of integrated circuits most important in the country led by Xi Jinping, has the capacity to manufacture 7nm semiconductors. And maybe also 5nm. In this process it uses the UVP lithography equipment that it purchased from ASML before the US and Netherlands sanctions prevented it from acquiring more units of these machines, but to produce these chips, as we have explained In other articles, you are using a technique known as multiple patterning.

This strategy broadly consists of transferring the pattern to the wafer in several passes with the purpose of increasing the resolution of the lithographic process. The problem is that it has an impact rise in the cost of chips and a decrease in production capacity, although it works. In practice this means that SMIC presumably does not manufacture 7nm chips on a large scale. And possibly a good part of them are bought by Huawei.

In that case it is reasonable for us to ask ourselves what type of integrated circuits are being mass produced by Chinese manufacturers. And the answer is very revealing: these are chips derived from mature integration technologiesusually 28 nm or less advanced. After all, the semiconductors that we mostly find in electronic devices, household appliances or cars, among other products, have been produced using them.

Many Chinese chip manufacturers, such as Hua Hong Semiconductor, China Resources Microelectronics or Guangzhou ZenSemi, are manufacturing 28 nm integrated circuits or with even more mature technologies. And the Beijing Yandong Microelectronics (YDME) company is going to build a 4.6 billion dollar plant expressly to produce 28nm semiconductors on 300mm wafers. It is evident that these companies would not focus on the manufacturing of mature chips in this way if it were not a profitable strategy, and, above all, necessary to sustain the Chinese integrated circuit industry at a time as critical as the current one.

Image | Generated by Xataka with Gemini

More information | SCMP

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