Cambricon Profit Surges 1,033 Pct on DeepSeek-Driven AI Chip Demand

Cambricon Technologies Corp. reported a record profit of 1.03 billion yuan in the first half of 2025, reversing from a 533 million yuan loss a year earlier. This turnaround was driven by a 44-fold increase in revenue to 2.9 billion yuan, attributed to heightened demand for its AI chips following the launch of DeepSeek, a large language model developed by a Chinese startup. The company’s shares rose more than 8% in Shanghai, reflecting investor optimism about its role in the expanding domestic AI ecosystem [1].

The government’s push to prioritize local technology and reduce dependence on foreign semiconductors has bolstered sentiment toward domestic chipmakers. Cambricon, one of the largest listed AI chip designers in China, has seen its market value double to $80 billion in a single month. The firm has benefited from policy support aimed at fostering homegrown AI solutions, which has intensified as geopolitical tensions and supply chain disruptions persist [2].

In response to growing competition—particularly from U.S. firms like Nvidia—Cambricon has expanded its support for major domestic AI models, including DeepSeek, Alibaba’s Qwen, and Tencent’s Hunyuan. The company also announced a 4 billion yuan private placement in July to fund its large-model chip platform, signaling a strategic push to strengthen its technological base [3].

Despite the strong performance, Cambricon acknowledged that the AI chip market remains highly competitive, with only Nvidia maintaining a dominant position. The U.S. government’s recent easing of restrictions has allowed companies like AMD to resume sales of lower-end chips to China, further intensifying market dynamics [4].

Analysts have highlighted the government’s role as a critical factor in Cambricon’s success. “Amid U.S. restrictions on China’s AI sector, government support for leading domestic firms is essential to drive growth and replace imported chips,” said Ma Cheng, chairman of Shenzhen Juze Investment Management Co. The firm’s growth is seen as part of a broader shift in China’s tech landscape, where homegrown alternatives are gaining traction [5].

The rise of DeepSeek has also generated significant interest in Chinese chipmakers. Cambricon’s financial performance, coupled with industry speculation about its role in supplying next-generation AI chips to DeepSeek, underscores its strategic position in the supply chain. This development reflects a growing trend of Chinese startups and tech firms prioritizing domestic solutions to meet their AI infrastructure needs [6].

Cambricon’s success illustrates the potential of China’s AI chip industry. With continued policy support and increasing market adoption of local models, the company has demonstrated resilience and competitiveness in a global market dominated by foreign players [7].

Sources:

[1] Bloomberg.com

(https://www.bloomberg.com/news/articles/2025-08-26/china-ai-chip-leader-cambricon-sees-record-earnings-boost-from-deepseek)

[2] Financial Times

(https://www.ft.com/content/6f1d0cdb-adc6-4ac5-8ff1-19a0017bb963)

[3] South China Morning Post

(https://www.scmp.com/tech)

[4] pulse24.ai

(https://pulse24.ai/news/2025/8/27/1/cambricon-profits-surge-post-deepseek)

[5] X · business

(https://x.com/business/status/1960495744495886387)

[6] South China Morning Post

(https://www.scmp.com/topics/semiconductors)

[7] Tech in Asia

(https://www.techinasia.com/news/chinese-server-chipmakers-enter-super-cycle-as-govt-boosts-ai)