Huawei
Location: Shenzhen, Guangdong
Subsidiaries/Affiliates: HiSilicon, Huawei Cloud, DAMO Academy
Summary: Huawei sits at the center of China’s efforts to develop a self-sufficient AI chip ecosystem. Its subsidiary, HiSilicon, is by far the largest designer of AI chips and chip architecture (software) in China. The “Ascend” series of chips are able to replicate the performance of Nvidia’s chips in many respects, which has made Huawei a top contender to replace Nvidia chips in the China market. Huawei uses the chips it designs and manufactures in its own electronics products and data centers, which provides built-in demand for China’s chips via its unparalleled vertical integration. Huawei also offers servers and clusters for data centers. Finally, Huawei is a major investor in over 60 Chinese upstream and dowstream companies in the AI chip ecosystem via its billion-dollar venture capital fund “Hubble.”
Alibaba
Location: Hangzhou, Zhejiang
Subsidiaries/Affiliates: Pingtouge (T-Head), Alibaba Cloud
Summary: Alibaba is second behind Huawei in terms of sales of AI chips made in China, which it designs with its subsidiary, T-Head. Compared to Huawei, Alibaba is even more vertically integrated in that it not only designs AI chips but also develops proprietary open-access AI models which use T-Head chips for inference and training. Alibaba is also ahead of Huawei and all other Chinese companies in terms of its cloud computing business. Thus, Alibaba is the rare company that has both software and hardware AI capabilities, meaning that it can design its chips to maximize performance based on its own AI models. Alibaba is also expanding beyond GPUs to CPUs, memory chips, controller chips, networking chips, and RFID chips. With Nvidia chips heavily restricted by both the Chinese and U.S. governments, Alibaba will have no choice but to invest even more in its chip designs in the future.
SMIC
Location: Shanghai
Subsidiaries/Affiliates: N/A
Summary: Shanghai-based Semiconductor Manufacturing International Corporation (SMIC) is China’s answer to TSMC, the world’s top foundry for integrated circuits and a key partner of Nvidia. Since TSMC has been barred from manufacturing advanced AI chips for Chinese companies like Huawei and Alibaba, SMIC has been thrust into the spotlight as the only foundry capable of manufacturing Chinese chips at scale. Unlike TSMC, SMIC has not had access to EUV machines from ASML, which has significantly reduced its yield rates. Yet, the company has managed to overcome sanctions and obstacles to continue making chips for its Chinese clients as part of the “red chip” supply chain. Its dominance in China has elevated SMIC to third in the world in terms of foundry orders behind only TSMC and Samsung. Ironically, despite SMIC’s rivalry with TSMC, the company has been led by Taiwanese CEOs.
CXMT
Location: Hefei, Anhui
Subsidiaries/Affiliates: N/A
Summary: CXMT is the Chinese equivalent to SK Hynix or Samsung in the high-bandwidth memory (HBM) and dynamic random access memory (DRAM) chip market. As with TSMC and Nvidia, SK Hynix and Samsung have been prevented from producing their highest-level HBM chips in China, which makes CXMT the best chance for China to achieve self-sufficiency in this growing area of importance in the AI chip ecosystem. With HBM chips now in short supply, even Apple has requested the U.S. government to grant permission to buy CXMT DRAM chips to lower its expenses (CXMT has long been sanctioned by the U.S. due to alleged military ties). In advance of a massive Shanghai IPO in 2026, expected to raise $4.3 billion, CXMT signed a long-term supply agreement with Tencent worth nearly $3 billion.
