Cambricon Technologies briefly became the most expensive stock on China’s mainland on August 28, capping a frenzied rally fueled by investor optimism around Beijing’s semiconductor ambitions. Shares jumped 15.73% to a record 1,587.91 RMB (about US$222.32), pushing its market value to as high as 660 billion RMB. In so doing, it overtook liquor heavyweight Kweichow Moutai as the priciest mainland stock—before slipping back.
This rollercoaster ride reflects more than speculative fever: it underscores how deeply US-China tech tensions and Beijing’s “domestic substitution” policy have reshaped investor behavior. Under mounting US restrictions on China’s access to advanced chipmaking, investors rushed into domestic alternatives like Cambricon, banking that these players would gain from Beijing’s push for self-reliance in semiconductors.
Since early July, Cambricon’s stock has surged over 170%. Over the past year, its gain exceeds 500%. But the rapid ascent also reignited heated debate over how to value China’s nascent tech champions in an era of national strategies and geopolitical rivalry.
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Momentum Backed by Policy
Analysts caution that much of the excitement rests less on current fundamentals and more on promises of future dominance—a model some refer to as “sci-tech special valuation.” But this speculative momentum finds fuel in Beijing’s policy engine. In August, China’s State Council released its AI+ Action Plan, outlining a goal to embed AI across key industries by 2027 and to build a “smart economy” by 2035. As the only listed Chinese AI chipmaker with significant production capacity, Cambricon is widely seen as a prime beneficiary.
Foreign rivals have drawn scrutiny too. Nvidia’s H20 chip, tailor-made for China, sparked backlash over alleged remote shutdown risks—claims Nvidia has denied. Regardless, the incident fueled momentum for local suppliers. “Concerns around Nvidia’s ‘backdoor’ raised alarms,” said Leslie Wu, CEO of Dalian Ronghe Enterprise Management Consulting. “Even if export controls ease, the drive toward indigenous chips is irreversible.” Wu predicts China’s AI chip market will enter hypergrowth next year, as capacity expands and demand accelerates.
From Scrappy Startup to National Symbol
Cambricon was founded in 2016 in the wake of Google’s AlphaGo triumph. Its co-founders, Chen Tianshi and Chen Yunji, were trained at the Chinese Academy of Sciences and touted as semiconductor prodigies. Early funding came from both public and private backers—including Oriza Yuandian, iFlytek, and a CAS subsidiary. In a 2017 Series A round, institutional investors such as SDIC Venture Capital, Alibaba, and Lenovo joined in with ~100 million USD. SDIC played a strategic role early, investing ~900 million RMB and helping build client relationships.
Initially, Cambricon focused on supplying AI chip IPs for Huawei smartphones. Before 2019, Huawei accounted for nearly all of Cambricon’s revenue. However, after US sanctions forced Huawei to internalize chip production, Cambricon’s income plunged. In the first half of 2020, its revenue from Huawei fell nearly 80%, to just 5.5 million RMB.
In 2020, Cambricon made history as the first AI chip company to list on the STAR Market. But its stock languished for nearly two years, lamenting a narrow customer base and weak demand.
The turning point arrived in late 2022, when the US introduced sweeping export controls on China’s semiconductor supply chain. Cambricon itself was added to the US Commerce Department’s Entity List in December, severing its ties to TSMC. Paradoxically, the restrictions sparked surging local demand—especially as Nvidia’s exports to China slowed. Cambricon rapidly pivoted, partnering with local giants like SMIC and ramping up on-shore manufacturing. By 2024, filings showed a sharp rise in material purchases—a telltale sign of scaled production and local supply chain integration.
Booming Growth — and a Dangerous Valuation
Cambricon’s performance shift is stark. In the first half of 2025, it reported a 43-fold increase in revenue to 2.88 billion RMB and delivered its first positive operating cash flow. Nearly all of its sales now stem from cloud-related products.
The demand stems from a fierce AI computing arms race. Goldman Sachs notes Alibaba doubled its tech spending year-over-year in Q2, while Tencent’s surged 119%. State carriers are also ramping: China Mobile plans to increase AI compute capacity by 16% in 2025.
Caixin sources say ByteDance placed an initial order of 200,000 Cambricon chips, yet delivery is constrained by production. Alibaba, Tencent, and Baidu are testing the chips but have yet to commit to mass orders.
Competition is sharpest between Cambricon and Huawei. The three major telecom carriers mostly favor Huawei thanks to its scale and infrastructure reach. But tech firms competing with Huawei may prefer contrast and flexibility—tools Cambricon can offer.
Nevertheless, the gap is wide. In 2024, Huawei shipped 300,000–400,000 Ascend AI chips; Cambricon shipped just over 10,000. A Tencent source revealed the company is scrambling to diversify its compute mix: deploying existing foreign chips while tapping domestic suppliers. Chip performance from Cambricon, Huawei, and others now approaches Nvidia’s H20—but all still struggle with production constraints.
Wu forecasts that in 2025, Huawei could hit 1 million units, while Cambricon might reach 80,000, and then double again in 2026. Goldman predicts Cambricon will ship 1 million AI chips by 2028 (11% of the Chinese market) and exceed 2 million by 2030, fortified by its investments in AI software and hardware integration.
Frequently Asked Questions:
What is Cambricon Technologies and why is it significant in China’s AI industry?
Cambricon Technologies Corp. Ltd. is a leading Chinese artificial intelligence (AI) chipmaker founded in 2016. It develops advanced processors designed for AI applications, including cloud computing, edge computing, and smart devices. The company plays a key role in China’s drive for semiconductor self-reliance, especially as U.S. trade restrictions tighten.
Why did Cambricon’s stock price skyrocket in 2025?
Cambricon’s shares surged more than 170% since July 2025 due to massive investor optimism over Beijing’s “domestic substitution” strategy. With the U.S. restricting China’s access to advanced chips, investors poured money into domestic companies like Cambricon, viewing them as vital to China’s tech independence. The company’s inclusion in major stock indexes also fueled buying momentum.
How high did Cambricon’s stock go and what caused the pullback?
On August 28, 2025, Cambricon’s stock reached a record 1,587.91 RMB (US$222.32) per share, briefly becoming the most expensive stock on the Chinese mainland. However, the price soon corrected to around 1,200 RMB due to market volatility and profit-taking. It later stabilized near 1,400 RMB as confidence returned.
What role do U.S. sanctions play in Cambricon’s success?
Ironically, U.S. export restrictions on advanced chips and equipment have helped Cambricon. When Nvidia and other American suppliers faced limits on sales to China, domestic tech giants turned to local chipmakers. These sanctions accelerated Beijing’s support for homegrown semiconductor companies and gave Cambricon a strong demand boost.
What challenges does Cambricon currently face?
Despite soaring valuations, Cambricon faces production bottlenecks, low chip yields, and limited manufacturing capacity. Analysts warn that its output may not yet meet demand from major clients. Moreover, the company’s high valuation—far above industry averages—raises concerns about a potential market bubble.
How is Cambricon competing with Huawei in the AI chip sector?
Huawei remains Cambricon’s biggest domestic rival. Huawei’s Ascend AI chips dominate among state telecom operators due to scale and reliability. However, tech firms like Alibaba, Tencent, and ByteDance are testing or adopting Cambricon’s chips as an alternative. While Huawei shipped up to 400,000 chips in 2024, Cambricon shipped around 10,000 but is rapidly scaling production.
What are analysts predicting for Cambricon’s future growth?
According to Goldman Sachs, Cambricon could ship 1 million AI chips by 2028, capturing about 11% of China’s market. By 2030, shipments could surpass 2 million units, supported by growing AI investments and improved domestic manufacturing. However, achieving these targets depends on sustained innovation and government support.
Conclusion
Cambricon’s journey from a promising AI startup to one of China’s most valuable tech firms captures both the power and peril of ambition in a fast-changing global landscape. Its meteoric rise mirrors Beijing’s determination to achieve technological self-sufficiency amid U.S. trade restrictions, while its recent challenges underscore the realities of scaling innovation in a fiercely competitive industry.
Despite production constraints, market volatility, and an inflated valuation, Cambricon remains a symbol of China’s AI resilience—a homegrown contender pushing the boundaries of semiconductor design and manufacturing. Continued government backing, strategic partnerships, and strong domestic demand may sustain its momentum, but long-term success will depend on execution, innovation, and market trust.
