Chinese domestic chips could reach 5 million units in 2026, according to an expert hosted by Deutsche Bank. With the country cut off from advanced AI chips by US sanctions, most of its domestic chip manufacturing requirements are met by the Semiconductor Manufacturing International Corporation (SMIC) and the Shanghai Huahong Grace Semiconductor Manufacturing Corporation. Chinese firm Moonshot's Kimi K3 AI, which the firm claims was trained exclusively on domestic chips.
Chinese Domestic Chips Could Reach 5 Million In Shipments In 2026, Believes Expert
China's domestic industry is facing pressure to keep up with local demand as the country is restricted from buying the latest AI GPUs from NVIDIA. Additionally, while NVIDIA has designed China-specific chips to comply with the sanctions, the Chinese government is restricting local companies from buying NVIDIA's special chips in order to stimulate domestic chip production.
The efforts to boost local production come even as China's major chip manufacturers are sanctioned from acquiring the latest chip manufacturing machines that are necessary to manufacture the leading-edge GPUs.
More recently, the domestic Chinese chip manufacturing sector came into the spotlight after Moonshot AI claimed that its Kimi K3 AI model was developed exclusively on local chips.
Now, according to details of an expert call hosted by Deutsche Bank, domestic Chinese chip shipments could sit at 5 million units in 2026. The details suggest that the chips from local companies shipped 4 million units in 2025 and are expected to ship 5 million this year. Overall, the sector is expected to grow at a compounded annual growth rate (CAGR) of 30% over the next two to three years, and within this figure, the domestic share led by SMIC and Shanghai Hua Hong is expected to grow to over 50% from 40%.
These figures are also mirrored by investment bank JPMorgan. In a report, JPMorgan comments that domestic AI chip shipments can jump from 1 million in 2025 to five million in 2028. The bank expects that Huawei and government-backed Cambricon Technologies will account for the lion's share of this growth.
Cambricon created quite a bit of a stir last year when Goldman Sachs estimated that the firm was expected to ship 2.3 million units of its AI chip in 2030. The boon came after US sanctions, which forced Chinese AI developers to rely on domestically designed products. The firm was also reported to earn 80% of its revenue from ByteDance.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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