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China’s No. 2 chipmaker readies 7 nm production as Beijing ramps up self-suffiency drive

Huali aims to produce a few thousand 7 nm wafers monthly by year-end, becoming China's second chipmaker to reach this advanced technology for AI chip production.

  • On March 16, Reuters reported Huali Microelectronics is readying a 7-nanometre chipmaking process at its Shanghai plant, which would make it China's second domestic firm with such advanced capability.
  • Beijing has encouraged domestic firms to purchase homegrown alternatives as it seeks to reduce reliance on foreign suppliers; Hua Hong Semiconductor announced in December plans to acquire Huali and raise 7.56 billion yuan for technological upgrades.
  • Research and development at Hua Hong Fab 6 began last year with support from domestic suppliers including Huawei-backed SiCarrier, which tested equipment at a Shenzhen facility; Biren, a Chinese GPU designer, is using Huali's 7 nm line for tape-out.
  • Reuters could not determine how Hua Hong achieved the advanced capability or which major equipment suppliers were involved, highlighting unresolved technical questions. Hua Hong Group, as China's second-largest chipmaker, operates Fab 5 producing mature 40 nm to 55 nm technologies.
  • Huali plans initial 7 nm production capacity of a few thousand wafers per month by year-end with goals to ramp up later. SMIC, China's largest chipmaker, uses Dutch equipment maker ASML's immersion machines for 7 nm production but faces weak yields, underscoring competitive pressures.
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The Chinese Hua-Hong Group is expected to be able to produce 7nm chips. However, no high production capacity is expected in 2026.

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Reuters broke the news in United Kingdom on Monday, March 16, 2026.
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