Key Points
- Cambricon Technologies shares hit a record high, surging over 7% on Thursday.
- The surge follows increased optimism surrounding Beijing’s promotion of domestic AI chips.
- Nvidia’s uncertainty over H20 chip sales to China fueled bets on increased Chinese demand for domestic alternatives.
- Cambricon reported record first-half profit and a 44-fold revenue surge.
Cambricon Technologies Corp (SS:688256), a prominent Chinese AI chipmaker, saw its shares reach a record high on Thursday, extending a remarkable surge fueled by growing confidence in Beijing’s initiative to bolster the domestic AI chip industry.
The company’s stock price jumped over 7%, closing at 1,484.02 yuan in Shanghai, adding to an already impressive gain of over 100% in August alone. This dramatic rise comes amidst increasing scrutiny of foreign AI chips, particularly those from Nvidia, within China.
Nvidia’s recent second-quarter earnings report revealed uncertainty regarding the sale of its H20 chip to China. Despite receiving US government approval, Nvidia reported zero H20 chip shipments to China in August. It excluded potential sales from its current quarter revenue guidance. This uncertainty significantly bolstered the narrative supporting increased demand for domestically-produced AI chips in China.
The situation is further complicated by lingering geopolitical tensions and concerns over potential “backdoor” controls and security vulnerabilities within imported chips.
Adding to the positive momentum for Cambricon, the company recently announced a record first-half profit of 1 billion yuan ($140 million), accompanied by a staggering 44-fold increase in revenue. This robust financial performance reinforces the company’s position as a key player in China’s push for self-reliance in the crucial AI chip sector.
Cambricon, alongside tech giants like Huawei, Alibaba, and Baidu, is at the forefront of this national effort.
The recent announcement by Chinese AI major DeepSeek to develop an AI model specifically designed for Chinese chips further underscores the growing trend of domestic adoption.
While Cambricon’s future remains partially contingent on the resolution of Nvidia’s sales issues in China, the current market sentiment strongly favors the continued growth and success of domestic AI chip manufacturers, such as Cambricon.
