1. [para. 1][para. 5][para. 7] Cambricon Technologies Corp. Ltd., the leading Chinese AI-chip maker, saw its explosive growth slow sharply in the second quarter of 2025 as it contends with supply constraints and rising domestic competition. This slowdown follows strict U.S. export controls on Nvidia’s advanced AI chips. Washington required a license for Nvidia’s H20 chips to China and Hong Kong in April 2025, creating a significant opening for domestic suppliers like Cambricon. This regulatory shift fueled a massive surge in demand, enabling Cambricon to swing to its first-ever profit in 2025. Its first-half revenue jumped more than 40-fold compared to the previous year, demonstrating the initial profound impact of the sanctions.
2. [para. 2][para. 4] Reflecting this boom, the Shanghai-listed company posted revenue of 5.99 billion yuan ($888 million) for the first half of 2025, up 108% year over year. Net profit excluding non-recurring items jumped 137% to 2.2 billion yuan. However, a closer look at the quarterly trajectory reveals a significant cooldown. Second-quarter revenue rose 76% from a year earlier, a stark contrast to the approximately 160% growth achieved in the first quarter. This sharp deceleration follows the truly extraordinary increases of more than 40-fold seen in the first half of 2025, when the company was benefiting most directly from the initial shock and rapid substitution of Western chips.
3. [para. 3][para. 8] The company stated that its chips continue to gain strong traction across key industries, particularly in finance and internet services. Deployments are expanding into cutting-edge fields such as large-language models, multimodal AI, and search-and-recommendation systems. The company has successfully secured significant orders from major internet customers. ByteDance Ltd., the owner of TikTok and a giant in China's digital economy, is currently Cambricon’s largest internet-sector customer and has placed preorders for approximately 200,000 chips, as previously reported by Caixin. This highlights the strong and ongoing demand for domestic AI hardware from China's leading tech firms.
4. [para. 9] Despite the surge in demand and strong customer interest, Chinese AI-chip makers continue to face a highly challenging production environment. According to industry executives, they are dealing with persistent shortages of production capacity and relatively low manufacturing yields. These bottlenecks mean that simply scaling up to meet demand is incredibly difficult, making the expansion of manufacturing supply one of the most pressing priorities for the entire domestic semiconductor industry as it seeks to secure its own supply chain.
5. [para. 10] Competition within the Chinese AI-chip market is also intensifying significantly. Rivals Alibaba Group Holding Ltd. and Baidu Inc. have both developed their own proprietary AI chips and are now moving toward separate listings of their semiconductor units. Alibaba is preparing its wholly owned chip subsidiary, T-Head, for an eventual listing. Meanwhile, Baidu’s Kunlunxin filed confidentially for a Hong Kong initial public offering in January, signaling the heightened stakes and strategic importance of achieving self-sufficiency in the domestic AI chip sector.
AI generated, for reference only
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