Source Credit : Portfolio Prints
Chinese semiconductor firms posted record revenues last year, fueled by surging demand for artificial intelligence, a global memory chip shortage, and U.S. export restrictions that have accelerated Beijing’s push to strengthen its domestic tech industry.
The momentum is expected to continue, with both analysts and companies forecasting further revenue growth this year as Chinese chipmakers capitalize on rising demand from local tech giants building out AI infrastructure.
U.S. export curbs have acted as “rocket fuel” for the sector, amplifying demand across industries such as electric vehicles and AI data centers, according to Paul Triolo of Albright Stonebridge Group.
Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, reported a 16% year-on-year increase in 2025 revenue to a record $9.3 billion. Analysts expect revenue to surpass $11 billion in 2026. Meanwhile, Hua Hong Semiconductor posted record fourth-quarter revenue of $659.9 million and projected stable near-term sales.
Emerging players are also gaining ground. Moore Threads, which aims to compete with Nvidia, expects 2025 revenue to reach between 1.45 billion yuan and 1.52 billion yuan—representing annual growth of over 230%.
Several forces are driving this expansion. The rise of electric vehicles has boosted demand for “mature node” chips, while AI has sent demand for advanced semiconductors soaring. At the same time, U.S. restrictions limiting China’s access to critical technologies have intensified efforts to achieve self-sufficiency.
Recent export controls on advanced AI chips from Nvidia have further pushed Chinese firms toward domestic alternatives. Huawei has stepped in to fill part of the gap, even though its chips still lag behind leading global competitors in performance.
“While China does not yet lead in peak GPU performance, these homegrown solutions are filling the domestic ‘compute gap’ and driving record revenues,” said Parv Sharma of Counterpoint Research.
China’s memory chip sector has also benefited from tight global supply. ChangXin Memory Technologies (CXMT) reportedly saw revenue surge more than 130% year-on-year to over 55 billion yuan ($8 billion).
High-bandwidth memory (HBM), a critical component for AI workloads, remains dominated by Samsung Electronics, SK Hynix, and Micron Technology. However, export restrictions have created an opening for CXMT, even with older-generation technologies such as HBM2 and HBM2e. The company is expected to begin producing HBM3 this year.
Industry experts say China’s growing expertise in memory manufacturing could spill over into other areas, including GPUs. “All the memory fabs in China are now incubators for advanced process technology,” Triolo noted.
Despite the strong revenue growth, Chinese chipmakers still lag global leaders in technological capability. Companies like SMIC and Hua Hong remain unable to mass-produce the most advanced chips at scale, largely due to restricted access to cutting-edge equipment from ASML.
Building a fully self-reliant semiconductor ecosystem remains a complex and long-term challenge. “China is attempting to recreate large parts of the global semiconductor supply chain domestically,” Triolo said, “and that will take time.”
There are also risks ahead. Much of the current growth is driven by import substitution, raising concerns about potential overcapacity in less-advanced chips. Sustaining momentum will depend on whether Chinese firms can move up the value chain into advanced memory and next-generation logic technologies.
