China’s No. 2 chipmaker prepares 7nm process as Beijing pushes semiconductor self-reliance
By Cygnus | 16 Mar 2026
Summary
Hua Hong Semiconductor, China’s second-largest contract chipmaker, is preparing a 7-nanometre (nm) manufacturing process, according to people familiar with the matter, potentially expanding the country’s domestic capacity for advanced semiconductor production.
SINGAPORE, March 16, 2026 (Reuters) — China’s Hua Hong Semiconductor is preparing to introduce a 7nm manufacturing process at its Huali Microelectronics facility in Shanghai, according to sources familiar with the project.
If commercialised, the move would make Hua Hong the second Chinese foundry capable of producing advanced logic chips at the 7nm level, after Semiconductor Manufacturing International Corp (SMIC).
The development comes as Beijing accelerates efforts to reduce reliance on foreign semiconductor technologies amid ongoing export controls.
Domestic collaboration
Sources said the progress reflects closer cooperation across China’s semiconductor supply chain.
Industry observers note that domestic equipment providers and technology partners have increasingly supported local foundries as access to advanced foreign chipmaking tools remains restricted.
One such participant cited by sources is SiCarrier, a Chinese semiconductor equipment firm linked to technology development efforts in Shenzhen.
The company’s progress follows a capital raise in late 2025 in which Hua Hong Semiconductor secured roughly 7.56 billion yuan ($1.1 billion) to expand fabrication capacity and research.
Potential customers and early production
Chinese GPU designer Biren Technology is among firms reportedly exploring the process for chip design tape-outs, according to people familiar with the matter.
Tape-out marks the final design stage before semiconductor manufacturing begins.
Huali’s initial capacity could reach several thousand wafers per month by late 2026, with potential expansion in subsequent years.
Industry context
China’s domestic semiconductor sector has accelerated development following restrictions on advanced chipmaking tools and high-performance processors.
While global leaders such as TSMC continue advancing toward 2nm manufacturing, analysts say 7nm remains a commercially important node for many applications including artificial intelligence and high-performance computing.
Foundry comparison
| Foundry | Advanced node | Status |
|---|---|---|
| SMIC | 7nm | Limited production |
| Hua Hong (Huali) | 7nm | Test production / early design stage |
| TSMC | 3nm / 2nm | Leading edge |
Why this matters
- Semiconductor resilience: Expands China’s domestic chip manufacturing capability.
- AI development: Advanced nodes remain essential for high-performance computing.
- Geopolitical competition: Highlights continued technological competition in semiconductors.
Frequently asked questions (FAQs)
Q1. How could Hua Hong reach 7nm without EUV machines?
Analysts believe Chinese foundries are using multi-patterning techniques with deep ultraviolet (DUV) lithography instead of extreme ultraviolet (EUV) tools.
Q2. Does this mean China has caught up to leading chipmakers?
Not yet. Companies such as TSMC and Intel are moving toward 2nm nodes, which remain significantly more advanced.
Q3. When could these chips reach the market?
Sources suggest limited output could begin by late 2026 with larger-scale production possible later.
