Hua Hong becomes the second Chinese chipmaker to crack 7nm manufacturing as Beijing pushes for AI independence

China's second-largest chip manufacturer, Hua Hong Group, has developed advanced manufacturing technologies for AI chips, according to Reuters. Subsidiary Huali Microelectronics is preparing 7nm chip production at its Shanghai factory, which would make Hua Hong the second Chinese manufacturer with this capability after SMIC. Three people familiar with the matter say Chinese tech giant Huawei is collaborating with Hua Hong on the 7nm technology.

Research began last year with support from domestic suppliers, including Huawei-affiliated SiCarrier. Huali plans an initial capacity of several thousand wafers per month by year's end. Chinese chip designer Biren, on a US restricted list since 2023 and cut off from TSMC, is already using Huali's 7nm line for initial prototypes.

Beijing is urging domestic companies to buy Chinese-made technology—particularly for AI—as it pushes for technological independence. The effort is driven by US restrictions on Nvidia chip purchases and China's reliance on a core AI technology controlled by a Western rival. But the gap remains significant: Bytedance reportedly just bought around 500 Nvidia Blackwell systems.