China’s chip manufacturing sector experienced an extraordinary profit increase of 2,579.5 percent in the first half of 2026, driven by surging demand linked to the rapid adoption of artificial intelligence (AI) and high-performance computing, according to data from the National Bureau of Statistics (NBS).
Yu Weining, chief statistician of the NBS department overseeing industrial statistics, attributed the sharp rise to the integration of AI technologies across multiple industries, which significantly boosted the need for computing power. This surge also contributed to a 97 percent year-on-year increase in profits within the broader electronics sector, which played a major role in the overall expansion of industrial earnings. Profits for China’s major industrial enterprises—defined as those with annual revenues exceeding 20 million yuan (approximately HK$23.1 million)—grew 18.7 percent to total 4 trillion yuan during the same period.
This remarkable growth contrasts with the first half of 2025, when AI-related demand had yet to take off globally. In that period, total industrial profits declined by 1.8 percent to 3.4 trillion yuan, and the electronics sector reported a modest 3.5 percent increase in profits year on year. The NBS did not provide specific profit figures for the chip manufacturing sector for that earlier period.
China's industrial landscape is undergoing a significant transformation as the global AI boom propels demand for advanced computing and memory chips. Correspondingly, chip exports from China have increased alongside international efforts to expand AI infrastructure. Data released by the NBS indicated that integrated circuit production rose by 3 percent year on year in the first six months of 2026, reaching nearly 280 billion units, or an average daily output exceeding 1.5 billion chips.
Leading domestic chipmakers have reported substantial profit growth aligned with the AI-driven industry surge and Beijing’s strategic goals to achieve technological self-reliance in semiconductor manufacturing. Shenzhen Longsys Electronics, a prominent memory module producer, projected first-half profits to rise more than 600 times compared to the previous year. Similarly, flash memory designer GigaDevice forecasted a net profit increase of approximately 1,099 percent, supported by constrained supply and rising product prices.
On the AI chip front, companies also experienced notable earnings growth, albeit at a slower rate than the memory sector. Hygon Information Technology, which specializes in central processing units and AI-focused accelerator cards, anticipates an increase in first-half profits of up to 52.3 percent.
These figures underscore the accelerating momentum within China's semiconductor industry amid the global expansion of AI technologies and the country’s emphasis on cultivating a robust domestic chip sector.