Zhejiang province, home to Alibaba and Unitree, has set clear targets to develop cutting-edge chips and chipmaking equipment over the next five years. The province is the latest locality to prioritize innovation under its new five-year plan. It joins other hubs, including Shenzhen and Shanghai, that have thrown their weight behind the Chinese government's nationwide strategy to develop indigenous technologies amid an intensifying rivalry with the United States. The province will focus on chip design and wafer manufacturing, aiming to achieve rapid progress across 3- to 7-nm processing nodes, according to its draft industrial development document for 2026 to 2030. Advanced chips have become the main pillar of income for some global tech firms, underscoring the weight of Zhejiang’s ambitions.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, announced that combined shipments of its 3-nm, 5-nm and 7-nm chips made up 77% of its total wafer revenue in the fourth quarter of 2025. A 7-nm chip contains about 90 million to 100 million transistors per square millimeter, while a more powerful 3-nm chip boasts about 200 million to 224 million. Zhejiang also plans to develop low-power, high-end general-purpose and artificial intelligence (AI) chips, as well as fifth-generation RISC-V chip architecture. The province has nurtured a new breed of start-ups in AI, chips and humanoid robots in recent years, supported by a vibrant tech and innovation ecosystem and the prestigious Zhejiang University.
Alibaba’s semiconductor design arm T-Head has developed an AI chip that is said to be approaching parity with Nvidia’s H20 in performance benchmarks. Zhejiang’s ambitions dovetail with China’s broader pursuit of self-reliance, as it strives to break a U.S.-led stranglehold on some critical technologies, including export controls on advanced chips and the equipment needed to mass-produce them. Beijing’s strategy shows no sign of slowing, despite the Trump Administration green-lighting sales of Nvidia’s H200 AI chips on the condition that Nvidia's China shipments account for no more than half of the amount sold domestically.
A January report by Bernstein Research, a global equity research and brokerage firm, forecast rapid growth in China’s AI chip production capacity, projecting domestic sales would grow at a compound annual rate of 74% over the next three years. The firm also estimated domestic vendors’ market share rising from an estimated 58% in 2025 to 93% in 2028. Zhejiang’s plan also outlined ambitions to develop compound semiconductor materials, electronic speciality gases, high-purity sputtering targets and photoresists. Advanced lithography machines were also mentioned, as China mobilizes resources to push for breakthroughs in chipmaking equipment.
In the field of next-generation semiconductors, the province set goals to develop gallium oxide, diamond, silicon carbide and gallium nitride, as part of a broader shift towards new materials over traditional silicon. Meanwhile, the bleeding edge of the semiconductor industry has moved to the even more advanced 2-nm chips, which have been developed and are on the cusp of entering mass production at TSMC, with preparations for sub-2-nm ones, the South China Morning Post reports.
