In-Short
- Cambricon Technologies, a Chinese AI chip designer, reports its first quarterly profit.
- The company’s success reflects China’s growing AI chip development capabilities.
- US export controls have escalated, limiting China’s access to advanced semiconductor technology.
- Cambricon’s shares surged on the Shanghai Stock Exchange, indicating market confidence.
Summary of the US-China AI Chip Race
Cambricon Technologies, a Chinese chip designer, has achieved a significant milestone by reporting its first-ever quarterly profit. This development comes amidst heightened US export controls that have restricted Chinese companies from accessing sophisticated AI processors, such as those from Nvidia. Despite these challenges, Cambricon has grown from a startup in 2016 to China’s most valuable AI company, with a valuation of around 300 billion yuan ($41 billion).
The company’s financial success is a notable event in the technological rivalry between the US and China. After enduring years of losses, Cambricon’s final quarter of 2024 showed net profits between 240 million yuan to 328 million yuan. This turnaround has been met with enthusiasm in the market, with Cambricon’s stock price skyrocketing by over 470% in the past year.
Cambricon’s revenue is projected to increase by 70% to 1.2 billion yuan in 2024, bolstered by China’s commitment to building computing infrastructure for AI. The company’s 7-nanometre AI chips, particularly the Cambricon-1A processor, have found success in the domestic market, with support from major tech firms like Huawei Technologies.
With the US imposing new regulations in January 2025 to further restrict Chinese access to advanced AI technology, China’s AI semiconductor market is expected to grow, driven by Beijing’s goal for semiconductor self-sufficiency and domestic tech investments. Despite the progress, Cambricon must continue to innovate to keep up with international competitors.
Government support and domestic demand create a conducive environment for Cambricon’s growth, as evidenced by its inclusion in the SSE 50 Index. As global tensions rise and foreign technology access is curtailed, China’s focus on developing its own AI chip capabilities becomes crucial for its technological progress and economic security.
Further Reading
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