"Cambricon is experiencing a boom on China's stock market reminiscent of Nvidia. Now the chip developer itself is finding the hype too much."
Jensen Huang really tried. The CEO of chipmaker Nvidia first buttered up the government in Washington, then in Beijing. But it was all to no avail; Nvidia didn't sell a single chip developed specifically for China in the second quarter and doesn't expect this to change by the end of September. Huang, that much is clear, is rapidly losing ground in the world's second-largest chip market.
Instead, two brothers are now on top in China: the Chen brothers. Yunji Chen, 43, and Tianshi Chen, 41, are highly talented chip developers who, with their company Cambricon Technologies, are riding a wave the likes of which China's chip industry has rarely seen before. The two brothers are filling the gap left by Nvidia. And they're on it. They are about to become the face of China's chip breakthrough.
Cambricon essentially does the same thing as Nvidia: The company develops computer chips but has them built by contract manufacturers. But unlike Nvidia, Cambricon is highly regarded by Beijing. China wants to become independent from the US, and Cambricon is one of the answers to that. "The two are the classic founders that the Chinese like," says Shan Guo, a partner at the Chinese management consultancy Hutong Research. The brothers have almost identical histories: Both graduated from school a few years earlier, went to the same university, received their doctorates from the Chinese Academy of Sciences in their mid-twenties, and founded Cambricon together. Yunji is the chief scientist, Tianshi the managing director. Guo describes the two as "talented" and "a bit nerdy."
Things couldn't be going better for the Beijing-based company right now. It first benefited from US President Donald Trump banning Nvidia from selling the H20 chip in China, which the US company had developed specifically for the People's Republic. Some companies then turned to Cambricon, says Guo. And when Trump wanted to grant Nvidia licenses again in return for collecting a kind of export tariff from Nvidia, the Chinese government blocked the Nvidia chips.
But there are other factors that play into Cambricon's hands: Huawei and SMIC are building new factories that could triple AI chip production in China next year, according to the Financial Times. This also allows Cambricon to order more chips. Deepseek, China's AI hope par excellence, recently announced that its latest model is optimized for use with Chinese computer chips. Investors believe that this will lead more companies to buy Cambricon chips in the future. "All of this suggests that China's AI ecosystem is making a breakthrough." This means higher orders for Cambricon," says Guo.
The stock market performance now almost resembles Nvidia's, albeit at a significantly lower level. Within a year, the company's share price has increased more than sixfold, more than doubling in the past month alone. This week, the startup had a market capitalization of around €70 billion. By comparison, this would put Cambricon in the top ten most valuable DAX companies, just behind Rheinmetall and just ahead of Deutsche Bank.
At the end of this week, the company itself had run out of steam. Cambricon warned its investors: "There is a risk that the share price will deviate from the current fundamentals," Cambricon wrote in a stock exchange announcement. Investors face "significant risks." The share price subsequently fell by six percent on Friday.
Cambricon is at least partially selling the chips that Nvidia is no longer selling in China. Sales in the first half of the year shot up to almost three billion renminbi, equivalent to around €350 million. Euro, a forty-fourfold increase. For the full year, Cambricon conservatively estimates revenue of five to seven billion euros, meaning the second half of the year would be at the same level as the first. After a loss of 60 million euros in the first half of 2024, the company posted a profit of around 120 million euros this time. Anyone looking at the revenue curve sees the classic hockey stick curve that all startup founders dream of.
Cambricon is still very small. According to a Chinese company register, the company has just 550 employees. However, another 145 positions are advertised on the largest Chinese job platform, 131 of which are for developers.
Cambricon is considered the best alternative to the Huawei Group in China. Hisilicon, Huawei's semiconductor arm, is the largest chip designer in China. But Huawei, once Cambricon's most important customer, also builds its own factories and offers "the complete package of software and hardware," he says. Anyone who wants a complete AI platform goes to Huawei. But Huawei is a large corporation, and many of its potential customers are Huawei's competitors in other fields. Cambricon is therefore suitable for companies "that want more independence and flexibility," says Guo. The analyst firm Bernstein currently estimates Cambricon's market share in China at around three percent.
China's chip industry enjoys significant government support. It's difficult to say how much government support is involved in Cambricon, says Guo. On the one hand, the Chinese Academy of Sciences was the first investor, followed later by other state funds investing in the semiconductor industry. To date, the academy is the largest shareholder after Tianshi Cheng with almost 16 percent. On the other hand, several of China's tech companies are also investors. Furthermore, within a year, Cambricon designed a chip that was installed in Huawei phones, thus proving its commercial viability, says Guo.
When Huawei began designing chips under pressure from US sanctions, Cambricon's sales plummeted. Authorities and government clients stepped in and ensured that Cambricon wasn't left without customers. Three years ago, the US placed the company on a sanctions list, forcing Cambricon to lose its Taiwanese contract manufacturer TSMC and switch to Chinese manufacturers.
Cambricon and Huawei, however, are just the two most prominent players among China's Nvidia competitors. Other startups are waiting in the wings in the second tier, such as Birentech and Moore Threads. However, they are "much less developed," says Guo. For Nvidia CEO Huang, the scenario he has always warned about is now increasingly becoming a reality. The sanctions imposed by the US government on Nvidia may slow China down in the short term. But in the long term, they are breeding new competitors. Tianshi Chen's fortune is currently estimated by Forbes at around €22 billion, ten times as much as a year ago. (Commentary, page 24.)" [1]
1. Chinas Antwort auf Nvidia. Frankfurter Allgemeine Zeitung; Frankfurt. 30 Aug 2025: 23. Von Gustav Theile
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