Cambricon’s third quarter profit surges 148% to US$210m amid push to replace Nvidia chips

Cambricon Technologies, a prominent Chinese AI chip company, witnessed a remarkable 147.7 percent increase in profit for the third quarter of the year, reaching 1.4 billion yuan (210 million USD). This surge was driven by the nation's ambitious efforts to replace Nvidia chips, fueling growth among local chipmakers. The company reported a substantial 104.5 percent revenue growth, reaching 3.5 billion yuan, outpacing the 75.8 percent revenue increase seen in the previous quarter.

This impressive top-line growth directly contributed to the overall profit and net profit surge, according to Cambricon's stock exchange filing. The company's success is attributed to its continuous market expansion and initiatives to support AI applications. Shares of Cambricon rose 5.5 percent to 932.2 yuan ahead of the earnings release.

Similarly, Hygon Information Technology, another leading AI chipmaker in China, reported a 45.5 percent year-on-year revenue increase to 5.9 billion yuan and a 37.9 percent year-on-year net profit increase to 1 billion yuan. The growth at both companies reflects Beijing's initiative to create a self-sufficient AI computing ecosystem amid Washington's export controls limiting China's access to advanced AI accelerators from US chip giants like Nvidia.

Analysts suggest that Cambricon's earnings outlook largely depends on the commercialization progress of its latest chips, which are affected by supply chain pressures, particularly the shortage of high bandwidth memory chips required for AI data centers.