🧠 Food for thought

Implications, context, and why it matters.

China’s tech giants drive the chip boom

• Cambricon’s fast growth links to demand from China’s largest tech companies. Government policy also plays a part.
• ByteDance makes up more than half of Cambricon’s orders. Alibaba is also expected to deepen work with Cambricon as it scales domestic AI clusters 1.
• This buying wave pushed local chipmakers to about 35% of China’s AI server chip sales in the first half of 2025. Huawei’s Ascend line led domestic suppliers 2.

Rapid growth strains China’s chip supply chain

• Sales are climbing. Production choices remain fragile.
• Cambricon’s most advanced chips rely on Semiconductor Manufacturing International Corp. (SMIC) N+2 (7nm). Bloomberg put yield rates near 20% for Cambricon’s largest dies 1.
• AI accelerators need High Bandwidth Memory (HBM). South Korean firms dominate HBM3 and HBM3E, while China still lacks a competitive domestic alternative. That leaves reliance on SK Hynix and Samsung 1.
• Shortfalls are already hitting users. Zhipu AI publicly asked for more computing resources, saying repeated efforts with domestic chip partners have not fully resolved its current supply shortage 3.