Cambricon's Catapult and the Semiconductor Woes of China
The stock of the Chinese AI chip designer Cambricon Technologies (the common local name is Hanwuji) has recently shot up in value, but its fast-growing picture reveals ample opportunity and deep-seated challenges in China's tech sector. While US export controls prompted an unparalleled growth opportunity for Cambricon, an altogether different report suggests that the struggle before the country in terms of crucial fundamental technologies for chip manufacturing remains a big long-term issue.
Cambricon Reigning An AI Chip Power
He has heretofore suffered severe financial losses, but ever since the U. S. imposed restrictions on NVIDIA and AMD sales to China, the fortunes changed for Cambricon. The very decisions concerning the de facto export ban created a huge demand in the domestic market that Cambricon was by far the best positioned to serve. The outcome has been a phenomenal growth pattern, with revenues soaring 4,348% to $402 million in the first half of 2025.
Some of the key determinants of Cambricon's growth include:
- Outstanding Performance Against Competition: Reports say that the newly revamped Siyuan 590 AI chip can tap about 90% of the performance of NVIDIA's powerful A100 GPU.
- Shipment Growth From 0 to 60: Goldman Sachs projects shipments of this product to be 145,000 units in 2025 but exceeding 2.3 million units by 2030.
- Crazy Valuation: The market cap of the company has surpassed the $90 bn mark, prompting Goldman Sachs to keep raising its price target pretty routinely.
The Risks Remain Huge
Cambricon, however, has big risks. It faces competition from deep-pocketed rivals like Huawei and Alibaba. More fundamentally, it has been reported that the company depends on a single customer-BiteDance-for nearly 80% of its revenues, thus creating a chronic customer concentration risk.
China's 20-Year Lithography Hurdle
While companies like Cambricon do design the higher-end chips, its ability to manufacture them domestically for real is heavily constrained due to one bottleneck: lithography. According to the Goldman Sachs report, the current in-house level of lithography machinery in China is '65nm'- a technology term that was already in use by ASML (the world's leading supplier of lithography machines) 20 years ago.
Why Lithography is the Bottleneck
Lithography, as the very process under discussion, is used in transferring specific chip designs onto silicon wafers. Advanced lithography machines are those developed by the Dutch firm ASML, and these machines are so advanced that they can be used for the fabrication of the smallest and most powerful chips. Because they are considered by U. S. law to be dual-use items, the export of said machines to China is severely curtailed.
- Current situation-Chinese firms such as SMIC are limited to producing 7nm chips, probably using older ASML DUV machines, and cannot acquire the latest EUV machines that are required for 3nm or 2nm processes.
- Long way ahead: Goldman Sachs has noted that it took ASML 20 years of $40 billion worth of R&D just to go from 65nm to sub-3nm technologies.
Outlook: So from this standpoint, the report suggests that soon enough, Chinese domestic lithography companies would achieve concurrence with their Western counterparts. The estimate is for them to be at least 20 years behind.
The technological gap, in fact, represents a fundamental challenge to China's aspiration for semiconductor independence and impacts the whole domestic tech ecosystem, ranging from fabless designers such as Cambricon to stakeholders under sanctions like Huawei.
