Despite intense geopolitical pressure and sweeping US export controls, China has quietly cemented its position as the indispensable manufacturing hub for the global artificial intelligence boom. According to a new research report by Standard Chartered, China is now the world’s largest exporter of AI-related goods, accounting for approximately 19% of total global exports in 2025.
The data, highlighted in reports by CCTV and Xinhua, reveals that China’s export engine remains highly resilient. In the first quarter of 2026, AI-related exports grew by 14.7% year-on-year. Even more striking, combined exports of memory and processor components surged by 39.1% in the first three months of the year, according to data from the General Administration of Customs (GAC).
Filling the Global Supply Gap
The narrative surrounding the US-China tech war often focuses on the race for the most advanced, cutting-edge AI accelerators—a domain where the US, via Nvidia and AMD, maintains a lead. However, the broader AI ecosystem relies on a vast array of supporting hardware: legacy chips, memory semiconductors, advanced packaging components, cooling systems, and server infrastructure. It is in this foundational layer that China has achieved dominance.
“Amid geopolitical disruptions, China has rapidly scaled up production across legacy chips, memory semiconductors, and AI-supporting components,” Liu Yiming, an associate professor at Shandong University’s School of Economics, told Xinhua. “This expansion has not only filled global supply gaps but also has delivered efficient, stable, and cost-competitive supply.”
This massive scaling of production is the direct result of Beijing’s strategic pivot toward self-sufficiency. By subsidizing chipmaking at 3.6 times the rate of the US, China has built massive capacity in mature node manufacturing. While these chips cannot train frontier models like GPT-5, they are essential for edge AI devices, automotive applications, and the broader infrastructure that supports data centers.
The Failure of Decoupling
The Standard Chartered data underscores the profound difficulty of decoupling the global tech supply chain from China. While Washington has successfully restricted China’s access to the most advanced EUV lithography machines and top-tier GPUs, it has inadvertently accelerated China’s dominance in the rest of the hardware stack.
As global demand for AI infrastructure explodes, companies worldwide are turning to Chinese suppliers for the components needed to build out data centers and edge networks. The 39.1% surge in memory and processor component exports indicates that international buyers are prioritizing availability and cost-efficiency over geopolitical alignment.
This dynamic presents a complex challenge for US policymakers. As Nvidia CEO Jensen Huang recently warned, aggressive export controls are forcing China to build an independent ecosystem. The export data suggests that this ecosystem is not only serving domestic needs, where AI chip self-sufficiency has reached 41%, but is also now aggressively capturing global market share.
By dominating the supply of foundational AI hardware, China ensures that the global expansion of artificial intelligence remains deeply reliant on its manufacturing base, complicating efforts by the US and its allies to isolate Beijing technologically.