In Depth: Cambricon Tops China’s Market as Domestic AI Chip Drive Creates a New Billionaire

Cambricon Technologies Corp. Ltd., a prominent Chinese semiconductor company, has witnessed an extraordinary surge in its stock price and market valuation over the past year, establishing itself as a major player in China’s push for technological autonomy. Buoyed by strong national sentiment and escalating U.S. sanctions aimed at restricting China’s access to advanced semiconductors, Cambricon’s Shanghai-listed shares skyrocketed by 468% in one year and over 130% since July. At its peak, Cambricon briefly became China’s most valuable stock, surpassing even liquor giant Kweichow Moutai, with a market capitalization reaching 579.3 billion yuan ($81 billion) — more than 20 times its valuation at its July 2020 IPO. This remarkable rise underscores Beijing’s broader campaign for tech self-reliance, driving robust local demand for domestically produced chips amid mounting American export controls [para. 1][para. 2][para. 3].

The company’s meteoric ascent has also minted China’s first AI chip billionaire, Chen Tianshi, who co-founded Cambricon and holds a 29.63% stake worth over 171.6 billion yuan, according to recent market prices. The Hurun Global Rich List previously valued his fortune at 87 billion yuan, and he now nears the top 10 of China’s wealthiest individuals. Despite the euphoria, some observers caution that Cambricon’s lofty valuation is propelled more by investor sentiment than by underlying business fundamentals, with critics pointing to relatively modest revenues and profitability given its massive market cap [para. 4][para. 5][para. 6].

Cambricon’s origins can be traced back to brothers Chen Yunji and Chen Tianshi, both child prodigies admitted to the University of Science and Technology of China’s elite Junior Class. After attaining Ph.Ds. and focusing on AI-driven chip design at the Chinese Academy of Sciences' Institute of Computing Technology (ICT), the brothers launched Cambricon in 2016 following breakthroughs in AI hardware and growing recognition of the importance of specialized processors for artificial intelligence. While Tianshi became Cambricon’s full-time CEO, Yunji eventually returned to academia, recently being named the youngest candidate for membership in the Chinese Academy of Sciences’ Division of Information Technical Sciences. Their complementary talents — Yunji’s scholarship and Tianshi’s business acumen — laid the foundation for Cambricon’s early innovations and rapid progress [para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15][para. 16][para. 17].

Initially, Cambricon’s growth was heavily dependent on Huawei, which accounted for nearly all of its revenue by supplying AI chip designs for smartphones. However, U.S. sanctions forced Huawei to develop its own chips, slashing Cambricon’s income and prompting a pivot to government contracts and state-backed computing projects. This transition was crucial to the company’s 2020 listing on Shanghai’s STAR Market, even as questions lingered about its long-term reliance on state deals [para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25].

The true inflection point came with the tightening of U.S. export restrictions in October 2022, which included putting Cambricon on the U.S. Entity List. Although the stock initially dropped, Beijing’s intensified efforts to replace foreign technology led to surging demand for local AI chips. Cambricon’s stock soared to over 270 yuan by April 2023, driven further by additional U.S. controls on Nvidia exports and large domestic orders. The company’s latest semiannual report reveals a dramatic 4,347.8% year-on-year revenue increase to 2.88 billion yuan and a swing to 913 million yuan in net profit, with clients across telecom, finance, and internet sectors now deploying its chips at scale [para. 26][para. 27][para. 28][para. 29][para. 30][para. 31][para. 32][para. 33][para. 34].