Shanghai, China, startup Dishan Technology has made significant progress in developing a 2 nm AI chip and is currently in the prototype verification phase.
According to the South China Morning Post, while Dishan’s chip has not yet reached the tapeout stage, which represents the point where semiconductors can be manufactured, the company is looking to enter commercial deployment between late 2028 and 2029.
Previously, Dishan was targeting production for the first quarter of 2026.
The Dishan chip adopts a hybrid FinFET/GAA process along with a chiplet-based mixed architecture. Dishan said the chip could deliver about a 40% improvement to previous AI chips developed by the startup.
According to the report, Dishan plans to enhance its support for chip toolchains so that it can work with Nvidia’s CUDA-compatible compilers.
The development of the AI chip could position Dishan as one of the global front runners in AI chip design, according to market research firm TrendForce. However, the firm said it may be difficult to find a domestic foundry capable of turning the design into commercial chips.
This is problematic due to the export restrictions put in place by the U.S. and some of Europe for semiconductor equipment and advanced tools to be sent to Chinese semiconductor manufacturers, like foundry Semiconductor Manufacturing International Corp (SMIC).
While China has capability to manufacture chips at the 7 nm node, Huali Microelectronics, a contract manufacturing arm of China’s Hua Hong Group, is preparing a 7 nm process at its Shanghai facility. It would make Huali the second Chinese chipmaker capable of producing chips at this node. SMIC is the first to have this node.
Why it matters
China has been aggressively pursuing ramping up domestic manufacturing of various sectors including semiconductor equipment, wafer manufacturing, advanced packaging, display panels, drones, robotics, autonomous vehicles and state-of-the-art microelectronics.
Cut off from some imported semiconductor equipment and advanced edge AI processors due to export restrictions imposed by the U.S. and Europe, China has turned to internal vendors to build-up its own technology prowess to compete on the world stage.
On the semiconductor manufacturing side, China’s leading pure-play foundry SMIC has been developing its own equipment through collaborations with localized vendors while ramping up investment in 12-inch wafers. Recently, SMIC acquired SMNC to improve the foundry’s asset quality and support its long-term development of ICs across different process nodes.
In 2025, SMIC bought more land to expand future capacity focused on 12-inch semiconductor wafers and packaging.
Late in 2025, Peking University in China said it had developed an industrial process that could lead to lithography advancements domestically. Lithography technology is one of the main driving forces to scaling semiconductor manufacturing to allow for greater integration and more transistors on chips.
Originally when the export restrictions were put in place, domestic Chinese firms focused on more mature markets. But soon the Chinese government shifted to more advanced electronics while simultaneously developing mature processes.
