Cambricon turns annual profit for the first time amid China’s AI chip boom

Cambricon has achieved profitability for the first time in its history, and for China's AI hardware market, this is more than just a strong report. The company has demonstrated that Beijing's course toward replacing accelerators for artificial intelligence is already being converted into real revenue and market share.

First Profitable Year

On March 12, 2026, the company published its 2025 results: net profit reached 2.1 billion yuan, whereas a year earlier Cambricon had recorded a loss of 452 million. Revenue for the same period jumped from 1.2 billion to 6.5 billion yuan. For a manufacturer long regarded as one of the main local contenders for Nvidia's niche in China, this is a turning point. This is no longer about hopes for the future, but about confirmed business economics.

• Net profit — 2.1 billion yuan
• A year earlier — loss of 452 million yuan
• Revenue grew from 1.2 billion to 6.5 billion yuan
• This is the first profitable year in the company's history

Why Demand Grew

The main reason is a sharp shift in procurement by Chinese AI companies. Due to restrictions around Nvidia and uncertainty about future supplies of advanced accelerators, major players like Alibaba and Tencent are increasingly looking at local alternatives. In parallel, Beijing is directly pushing the market toward using Chinese chips, turning technological self-sufficiency from a political slogan into a practical procurement strategy. For Cambricon, this creates a rare window: demand is being shaped not just by the market, but by state industrial policy.

"This shift reflects the growth of geopolitical restrictions on the

import of advanced semiconductors and the strategic importance of computational power for large language models."

Additional impetus to the market came from China's new five-year plan, where accelerated AI chip development is marked as a priority. Against this backdrop, investors and customers have begun to assess local producers differently: not as a backup option, but as the foundation of future infrastructure. For the sector itself, this is an important psychological turning point. Not long ago, Chinese accelerators were discussed in the logic of "catching up," but now the conversation centers on who will capture the largest share of domestic demand.

Next Growth Stage

Now the question is not whether Cambricon can sell chips, but whether it can scale production. According to information close to the company, in 2026 the manufacturer wants to more than triple the output of AI accelerators and deliver around 500,000 units, including up to 300,000 of the most advanced Siyuan 590 and 690 models. Production is planned to rely primarily on SMIC's N+2 process node, which is typically described as the Chinese equivalent of 7 nm.

The ambitions here are dual. On one hand, Cambricon is trying to occupy part of the niche being freed up due to China's limited access to Nvidia's products. On the other, it needs to win market share from Huawei, which is also rapidly strengthening its position in AI infrastructure. According to Morgan Stanley's estimates, China's AI chip market could grow to $67 billion by 2030, with more than three-quarters of supplies coming from local companies. If this forecast even partially materializes, Cambricon's current report looks not like the peak of a cycle, but like an early signal of a much larger market reshuffling.

What This Means

Cambricon's first annual profit demonstrates that the Chinese AI ecosystem is beginning to build not only around models and clouds, but around its own hardware as well. For the market, this is an important marker: restrictions against Nvidia have not frozen demand, but rather redistributed it in favor of local producers. If Cambricon executes on its production plan and maintains margins, it could become one of the key beneficiaries of the next phase of the AI boom in China.