When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works .
(Image credit: Cambricon) Chinese tech firm Cambricon Technologies has plans to triple its production of domestic AI chips in 2026, according to Bloomberg . Although not officially announced, people familiar with the matter reportedly claim Cambricon is looking to fill the void left by Nvidia's pullback from the region over trade issues and government mandates, as well as to compete more effectively with national giant Huawei.
Questions still remain, however, over how Cambricon will achieve these aims, as it's not clear whether the fabrication capacity exists for it to complete its goals in such a short time frame.
Over the past year, Chinese access to high-end AI inferencing and training hardware from companies like Nvidia has been mixed. On-again, off-again trade tariffs and chip embargos made them an inconsistent source at best, even with robust smuggling schemes . As a result of this, combined with a growing sentiment that semiconductor manufacturing had become a national security issue as well as an economic one, China has been pushing for its national companies to rely more on Chinese-produced chips, especially for AI workloads.
China's chip champions ramp up production of AI accelerators at domestic fabs, but HBM and fab production capacity are towering bottlenecks
Huawei's Ascend AI chip ecosystem scales up as China pushes for semiconductor independence
This marks an enormous opportunity for companies like Huawei, and indeed Cambricon, as the few companies actually making money from AI are the ones selling the hardware. Huawei has already announced it will be doubling its own chip production output. But producing it is still not going to be easy, especially as these companies are competing for some of the same underlying wafers.
According to Bloomberg's sources, Cambricon is looking to ramp up to half a million AI accelerator chips in 2026, including 300,000 of its flagship Siyuan 590 and 690 chips. That's more than triple the 142,000 it is expected to make in 2025, according to Goldman Sachs estimates. For next year's totals, it will reportedly lean on Semiconductor Manufacturing International and its "N+2" 7-nanometer process node.
Cambricon may have the kind of money it needs to grab a fair share of the wafer supply, though. Its revenue for the last quarter reportedly jumped 14 times, showing an enormous surge in interest from domestic companies. It's reportedly secured contracts and interest from many of China's biggest AI firms, including Alibaba and ByteDance, as the government pushes them towards domestic suppliers .
The quality of local fabrication may prove problematic, though. Cambricon's 590 and 690 chips have a reported yield rate of just 20%, meaning only one in every five of the chips produced is actually viable for use. Even if it can secure production capacity from Semiconductor Manufacturing International for its chips, a sizeable portion of what it pays for may be unusable.
Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/chinese-tech-firm-cambricon-looks-to-step-into-nvidia-void-triple-ai-chip-production-next-year-seeks-to-rival-huawei-but-production-remains-a-concern#main
- https://www.tomshardware.com
- Dell and Lenovo set to increase server and PC costs by as much as 15% as soon as this month, according to industry sources — DRAM and AI demand create tight mar
- Benevolent Facebook trader exchanges 192GB of DDR5 worth $2,200 for one RTX 5070 Ti worth roughly $800 — says selling at such a high price would have been 'unet
- Samsung Odyssey G7 S40FG75 40-inch ultra-wide curved gaming monitor review: Fast, gorgeous, and immersive
- Huawei Ascend NPU roadmap examined — company targets 4 ZettaFLOPS FP4 performance by 2028, amid manufacturing constraints
- Scythe Big Shuriken 4 Review: Compact SFF cooling for Mini-ITX
Informational only. No financial advice. Do your own research.