#Semiconductors

Chinese AI company DeepSeek has begun developing its own AI chip focused on inference, aiming to reduce dependence on NVIDIA and Huawei chips. The project started about a year ago and is still in early stages, with DeepSeek actively recruiting chip design engineers and contacting foundries and storage companies. This move could reshape the AI hardware landscape in China and reduce DeepSeek's vulnerability to US export controls, which currently restrict access to advanced NVIDIA chips. If successful, it may also intensify competition with Huawei's Ascend series and other domestic chipmakers. The chip is designed specifically for inference, the phase where trained models generate responses, rather than training. DeepSeek previously relied on NVIDIA H800 and Huawei Ascend chips, and founder Liang Wenfeng acknowledged in a rare 2024 interview that chip restrictions are a challenge for the company.

Meta is planning to sell excess AI computing capacity and model services to external customers, signaling a potential entry into the cloud computing market. This news, combined with Apple's discussions to source chips from Chinese memory suppliers YMTC and CXMT, triggered a sharp sell-off in South Korean chipmakers like Samsung and SK Hynix. This development raises concerns about a potential slowdown in AI infrastructure investment by big tech, which could lead to oversupply of AI chips and memory components. It also threatens the dominance of South Korean memory leaders as Apple diversifies its supply chain to Chinese alternatives. The Kospi index fell up to 7% on July 2, 2026, with Samsung and SK Hynix dropping at least 8%, prompting a temporary halt in programmatic selling of Kospi futures. Apple is reportedly in talks with YMTC (NAND flash) and CXMT (DRAM) for chips used in devices sold in China.