Illustration: Liu Xidan/gt
The explosive growth of artificial intelligence (AI) applications has driven China's semiconductor industry to a pivotal stage of development. The surge in demand for AI-enabled technologies accelerates chip design innovation, and investment and market orders help shorten the transition from laboratory breakthroughs to commercial mass production. Despite tightening US restrictions on advanced technology, Chinese shipmakers have shown resilience and adaptability as they navigate this challenging landscape.
Of SWS Research's 102 A-share companies in the digital chip design, analog chip design, integrated circuit manufacturing and packaging and testing categories, 66 recorded profits in the first half of 2025. Notable players like Cambricon Technologies, Halo Microelectronics and 3Peak Inc have ranked as sector leaders in revenue growth, Shanghai Securities News reported Monday.
These financial results highlight more than a cyclical recovery. They demonstrate structural changes in the semiconductor value chain driven by widespread adoption of AI across the industry. The current range of high-tech applications is broad, including cloud computing, autonomous driving, generative AI, and industrial automation. These applications require an increasingly powerful and energy efficient chip with a customized architecture and faster upgrade cycles, creating feedback loops. AI adoption drives innovation, and technological advances further expand the scope of AI.
Chinese shipmakers are encouraged to accelerate their iterations as the market evolves. A strong inflow of capital and a robust end-market order will help strengthen this process and reduce the time between research and full-scale production. In the stock market, investors sentiment is clearly supporting Chinese shipmakers, in response to AI trends and trade dynamics. This development allows Chinese companies to seize opportunities despite external headwinds.
This resilience is especially important given the escalation of US restrictions. The US has curbed the export of advanced chips and provides banned access to critical manufacturing equipment. In the latest example, according to a notification released Friday, the US Department of Commerce has revoked the exemption from Samsung and SK Hynix using US technology in their Chinese operations, Bloomberg reported, further escalating Washington's strategy to block access to advanced semiconductor manufacturing technologies.
However, Chinese companies were able to adapt by strengthening their footing in the specialty segment. Their progress in related fields demonstrates the sector's ability to advance. Meanwhile, supportive policies support their momentum. China has consistently prioritized semiconductor development as a strategic goal and promotes innovation.
The adoption of AI is a global phenomenon, driving demand for semiconductors not only in China but also in other regions. High-performance computing chips are the core hardware that underpins the implementation of AI technology, and are most closely linked to its development. Companies in this segment have important opportunities arising from the burgeoning demand.
For Chinese companies, this creates opportunities to expand internationally and diversify revenue streams. However, US containment and lockdowns could continue to pose challenges, including limiting access to some international markets and technologies. Navigating this environment well is essential for long-term growth.
At this point, increasing revenue and increased investments bring valuable resources, but the impact depends on how effectively they are reinvested in long-term research and development (R&D). Sustainable advancements in China's chip sector require technological breakthroughs. Only by directing today's momentum towards R&D advances can the industry expand its “windows of opportunity” and build resilience.
If Chinese chipmakers succeed in developing a robust innovation ecosystem that can withstand external impacts and stable technology upgrades, they will not only achieve sustainable growth, but also strengthen China's role in the global semiconductor landscape.
AI waves have created unprecedented possibilities. The current trajectory suggests that even under external pressure, Chinese companies are paving the path of resilience and innovation. As demand for high-performance computing chips continues to grow, the Chinese semiconductor sector is well suited to leverage AI drive waves and convert it into long-term technical strength.
The author is a reporter for the Global Times. bizopinion@globaltimes.com.cn
