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China's most valuable artificial intelligence (AI) company, whose stock surged more than 470 per cent in the past 12 months, predicted its first-ever quarterly profit, adding fuel to hopes among some investors that the firm could replace US chip designer Nvidia in the local market amid Beijing's self-sufficiency drive.
Cambricon Technologies, which has a market capitalisation of about 300 billion yuan (US$41 billion), said in a stock filing on Tuesday that its full-year loss in 2024 was expected to narrow to between 396 million yuan and 484 million yuan.
That means in the last quarter, the company made net profits that ranged from 240 million yuan to 328 million yuan, after posting a loss of 724 million yuan in the first nine months of the year. That marked the first quarter that Cambricon had become profitable.
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The Beijing-based company also said its revenues last year were forecast to increase nearly 70 per cent to 1.2 billion yuan.
Its Shanghai-listed shares closed at 695.96 yuan on Wednesday, a hefty rise from 120.80 yuan a year ago.
China is striving for semiconductor self-sufficiency amid a tech war with the US. Photo: AFP alt=China is striving for semiconductor self-sufficiency amid a tech war with the US. Photo: AFP>
Founded in 2016 and listed on Shanghai Stock Exchange's Nasdaq-style Star Market since July 2020, Cambricon is one of China's best hopes in developing home-grown graphics processing units, as the US has tightened export curbs on advanced AI products from the likes of Nvidia.
Cambricon specialises in developing 7-nanometre AI chips. It has launched several processors, including the Cambricon-1A, which is used in products such as those from Huawei Technologies.
Despite years of financial losses, Cambricon has become a darling for onshore Chinese stock investors, ranking first in Hurun's latest China Artificial Intelligence Enterprises Top 50 list. The stock was recently added to the SSE 50 Index, which tracks the 50 most valuable companies on the Shanghai Stock Exchange.
Although Cambricon's valuation remains only a fraction of Nvidia's US$3 trillion market cap, the Chinese company has drawn comparisons to the California-based juggernaut because they both focus on AI chips.
China's AI semiconductor market is projected to reach 178 billion yuan this year, according to Changjiang Securities. Domestic chipmakers are expected to benefit from "historic opportunities" driven by policies aimed at achieving semiconductor self-sufficiency, the brokerage said in a research note.