How Local Chinese Chipmakers Are Earning Hundreds of Percent in Profit

China's semiconductor sector is demonstrating phenomenal financial results amid the global boom surrounding AI. According to data from the analytical platform Wind, the aggregate net profit of 190 public Chinese companies related to chip manufacturing increased by 620% in the first half of the year compared to the same period last year.

As reported by Nikkei Asian Review, along with the impressive surge in profits, the revenue of these companies grew by 68%. Large-scale government support measures in China have served as an additional driver of this positive growth.

CXMT and YMTC Defying Sanctions

The main drivers of the Chinese industry are memory chip manufacturers CXMT and YMTC, which are rapidly closing the gap with their Western competitors.

In the first half of the year, CXMT managed to return to profitability, recording a net profit of $11.55 billion. The company's revenue reached $22.4 billion, exceeding its performance for the entire previous year.

In the first quarter of the current year alone, YMTC earned $7 billion in revenue (nearly five times more than its revenue for the entire previous year) and $5 billion in net profit, which is more than double its full-year result for previous periods.

The success of these giants triggers a chain reaction throughout the entire supply chain: related enterprises and suppliers of consumables are reporting multiple-fold increases in orders.

Import Substitution in Action

Restrictions on the purchase of advanced foreign equipment are forcing the Chinese industry to actively transition to domestic solutions. Suppliers of lithography equipment, such as AMEC, have already reported a fourfold increase in net profit for the first half of the year.

Going public is becoming a key tool for financing further expansion: CXMT has already raised private capital through a stock listing, while YMTC is preparing to follow suit with plans to raise approximately $5 billion.

A steady influx of funds from both customers and investors reinforces China’s strategic goal: to establish a semiconductor ecosystem by 2030 that is largely independent of Western technologies and components.