TMTPOST -- Cambricon Technologies Corp., one of China’s leading AI chip designers, reported a record profit in the first half of 2025, reflecting surging demand for domestic chips amid the post-DeepSeek AI boom and Beijing’s push for self-reliance in technology.
The Shenzhen-based company swung to a 1.03 billion yuan ($144 million) profit, a dramatic turnaround from a 533 million yuan loss a year earlier. Revenue skyrocketed roughly 44-fold to 2.9 billion yuan, fueling a more than 8% jump in its Shanghai-listed shares.
The strong performance underscores the accelerating adoption of local alternatives to U.S.-made chips, as both startups and tech giants like Alibaba Group Holding Ltd. increasingly leverage Chinese accelerators to develop and host AI models. Authorities have urged domestic agencies and enterprises to rely on homegrown technology, citing security concerns and persistent uncertainty over U.S. export restrictions on high-performance chips.
“Amid U.S. restrictions on China’s AI sector, government support for leading domestic firms is essential to drive growth and replace imported chips,” said Ma Cheng, chairman of Shenzhen Juze Investment Management Co. “Such protection is necessary, and Cambricon’s growth is far from temporary.”
The surge in Cambricon’s earnings has lifted sentiment toward the broader chip sector, even as geopolitical tensions and supply chain disruptions continue to weigh on markets. The company has seen its market value double to $80 billion this month alone, after emerging as China’s top-performing stock of 2024. The rally has been fueled by investor enthusiasm over government backing of AI development, including applications in intelligent vehicles, robotics, and large-scale AI models.
Cambricon has expanded compatibility with leading AI models in China, including DeepSeek, Alibaba’s Qwen, and Tencent Holdings Ltd.’s Hunyuan, ensuring its chips are widely adopted across the domestic AI ecosystem. The company also announced a 4 billion yuan private placement in July to fund its large-model chip platform.
The firm’s chips have become increasingly critical as Chinese authorities promote AI adoption in multiple sectors, from enterprise applications to intelligent robotics, reinforcing the country’s goal of building an independent technology ecosystem.
Despite Cambricon’s success, competition in the AI chip market remains fierce. Nvidia continues to hold a dominant position globally, and the U.S. government recently permitted Nvidia and Advanced Micro Devices Inc. to resume sales of certain lower-end chips to China, offering some relief for domestic firms but also raising the bar for local competitors.
In a striking market milestone, Cambricon’s stock overtook Kweichow Moutai, the country’s iconic liquor producer, as the most expensive stock in mainland China. Trading under the ticker 688256 on the Shanghai Stock Exchange, Cambricon shares surged 11.6% on Monday to a record 1,384.93 yuan, giving it a market capitalization of 579.38 billion yuan ($81 billion).
The stock has more than doubled this year and risen fivefold over the past 12 months, reflecting the growing investor focus on AI technology and the domestic chip industry.
Market analysts say the stock’s meteoric rise is underpinned by the government’s strong support for homegrown AI technology, as well as increasing demand for domestic chips from both established tech giants and emerging startups. Cambricon’s expanding collaboration with major AI platforms and its emphasis on large-model chip development position it well to capture a growing share of China’s AI market.
“Investors are optimistic about China’s AI future, particularly in light of DeepSeek’s latest model updates tailored for next-generation domestic chips,” said an analyst familiar with the sector. “Cambricon is benefiting directly from these trends, and the company’s financial performance reflects the broader shift toward local self-reliance in AI hardware.”
With its recent earnings surge, market leadership, and strategic positioning, Cambricon has solidified its status as a bellwether for China’s domestic AI chip industry, signaling the country’s ambitions to reduce reliance on foreign technology while nurturing homegrown champions in artificial intelligence.
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