Chinese local governments are implementing ambitious plans to reduce dependence on US semiconductors, with several regions setting targets to achieve over 70 percent self-sufficiency in chips used for artificial intelligence data centers, according to a recent report by Nikkei.
Beijing has set a more aggressive target, aiming for 100 percent semiconductor self-sufficiency by 2027. Shanghai plans to achieve over 70 percent domestic control in semiconductors used for AI data centers by the same year. Meanwhile, Guizhou Province’s Gui’an New Area requires approximately 90 percent of semiconductors in new AI-focused data centers to be domestically manufactured.
These local initiatives align with central government directives following a Chinese Communist Party Politburo collective study session on AI in late April, which emphasized support for domestic AI semiconductor development and production. The push comes as Chinese AI services from companies like DeepSeek and Alibaba Group continue expanding, yet remain heavily dependent on Nvidia chips.
China is attempting to transition from US Nvidia products to domestic alternatives like Huawei, but this shift faces significant technical hurdles. The Financial Times reported that DeepSeek’s new AI model development has been delayed due to malfunctions when using Huawei products, as encouraged by Chinese authorities. Additionally, the government is pressuring major private tech companies to adopt domestic semiconductors, with ByteDance reportedly considering Huawei products.
Semiconductor industry experts suggest that in sectors unrelated to economic security, China may continue importing Nvidia products to absorb advanced US technology while enhancing AI computing capabilities. Many analysts believe China will likely maintain a balance between Nvidia and domestic semiconductor sources in the near term, as the complete transition to domestic chips presents considerable technical and practical challenges.
Source: Central News Agency (Taiwan), August 25, 2025
https://www.cna.com.tw/news/acn/202508250092.aspx