China's leading GPU developers, Cambricon, Hygon, and Moore Threads, have reported significant growth in their first-half 2026 earnings, driven by domestic AI demand and U. S. export restrictions on advanced chips. This marks a shift from state-subsidized initiatives to tangible business success, as these companies move towards sustained profitability.
Cambricon emerged as a standout performer, achieving profit growth that outpaced revenue for the first time. Its revenue and net profit attributable to shareholders more than doubled year-on-year, reaching 6 billion yuan ($892 million) and 2.3 billion yuan, respectively. The company also recorded consecutive quarterly net profits exceeding 1 billion yuan. Nearly all of Cambricon's first-half revenue was derived from supplying cloud-based AI acceleration chips to major developers like DeepSeek and Moonshot AI.
Hygon reported the highest revenue among the trio, with a 66.5% year-on-year increase to 9.1 billion yuan. It posted a net profit of 1.8 billion yuan attributable to shareholders. Hygon's hybrid business model, which includes x86 architecture-based CPUs and deep computing units, has made it a preferred supplier for risk-averse clients in sectors such as telecommunications, finance, and government. However, rising raw material costs and increased sales and R&D expenses have caused profit growth to lag behind revenue growth.
Moore Threads led in growth velocity, with its first-half revenue surging 147.4% year-on-year to 1.7 billion yuan, surpassing its full-year 2025 revenue. As the only company among the three developing multipurpose GPUs for both AI computing and graphics rendering, Moore Threads reduced its net loss to 11.6 million yuan from 270.9 million yuan a year earlier. The company is expected to reach a profitability inflection point, paving the way for a planned Hong Kong IPO within a year.
The collective momentum of these companies underscores a strategic shift towards offering integrated turnkey solutions that combine hardware clusters with customized software. This approach aligns with the growing domestic AI infrastructure spending, as China's acceleration server market is projected to expand from $37.7 billion in 2025 to $150.1 billion in 2030, with a compound annual growth rate exceeding 30%.
Despite the positive outlook, substantial risks remain. Inventory levels have increased across all three companies, which could facilitate smoother deliveries. However, a sudden slowdown in downstream demand or rapid product iteration cycles could lead to significant write-downs, affecting profitability. Additionally, customer concentration poses a vulnerability, particularly for Cambricon, which heavily relies on hyperscale cloud clients. Changes in their procurement strategies could significantly impact Cambricon's financial health.
