Select Language:
China’s efforts to develop a domestic semiconductor supply chain have contributed to a 23% increase in profit for the country’s leading chip manufacturer last quarter compared to the same period a year earlier, despite the industry’s typical seasonal slowdown. The company has also adjusted its capacity to address ongoing shortages in the memory chip market, according to company executives.
The Beijing-based semiconductor manufacturer reported a net profit of 1.2 billion yuan (approximately $173.6 million) for the quarter ending December 31, 2025. Revenue increased by 12% to 17.8 billion yuan (around $2.6 billion), with a gross profit margin of 17.4%.
Based on International Financial Reporting Standards, the company’s quarterly revenue grew 13% year-over-year to about $2.5 billion, with a gross profit margin of 19.2%, as detailed in the financial filings.
For the entire year, the company noted that efforts to build a more self-reliant semiconductor supply chain in China helped boost demand, resulting in a 16% rise in revenue to $9.3 billion. Profitability also improved, with gross margin expanding by 3 percentage points to 21%. Capital expenditures increased by 11%, reaching approximately $8.1 billion.
Looking forward, the company indicated that opportunities from the localization of the supply chain will persist alongside ongoing challenges caused by memory chip shortages. It projects flat revenue for the first quarter compared to the previous quarter, with gross profit margins holding steady between 18% and 20%. For the full year, it expects sales growth to surpass the industry average, with capital spending remaining relatively unchanged from last year.
The global memory chip market has faced significant supply shortages since the second half of the previous year, driven by rising demand for artificial intelligence infrastructure. In response, the manufacturer has shifted as much capacity as possible toward producing high-demand memory products and associated logic chips, according to the company’s co-CEO. There has also been increased demand for circuits used in data transmission and edge AI applications.
In recent months, strong AI-related demand for memory has tightened supply for other sectors, such as smartphones, the CEO explained. Although device manufacturers can pass higher memory costs onto consumers, this often results in reduced demand. Consequently, manufacturers are seeing fewer orders for low- and mid-tier products, while orders for AI, memory, and other high-end components are increasing.
Looking ahead, the company expects demand for AI investments to stay robust for some time, likely maintaining a shortage of high-bandwidth memory needed for AI data centers over the next several years. Conversely, the shortage of consumer memory for mobile phones and computers could start to ease by the third quarter of this year.
ChatGPT
Perplexity
Gemini AI
Grok AI
