China’s chips march steadily globally, with the semiconductor industry delivering simultaneous growth in revenue and net profit

Against a backdrop of intensifying global tech competition and accelerated industrial chain restructuring, China’s semiconductor industry has emerged from its downturn for a strong recovery. Fueled by double-digit growth in both revenue and profits, it is steadily moving toward the center of the global stage. Latest data shows that after the industry correction in 2022–2023, China’s semiconductor sector staged a full recovery in 2025 and maintained robust growth momentum at the start of 2026. The whole chain spanning chip design, manufacturing, equipment and materials works in tandem: it not only realizes deep domestic substitution in the local market, but also reshapes the global semiconductor supply chain with cost-effective, reliably delivered mature-process products, evolving into an indispensable core supplier for the world’s electronics industry.

I. Explosive Performance: Revenue & Profit Accelerate Simultaneously on Strong Recovery Momentum

2025 marked a turning point for China’s semiconductor industry, as the sector exited a prolonged slump and entered a high-growth phase. Statistics from Securities Times DataBa indicate that among 173 A-share semiconductor firms, over 60% of the 165 companies with disclosed earnings turned profitable. Total industry revenue rose nearly 24% year-on-year, while net profit surged 29.23% — both growth rates far outpacing 2024 (21.44% revenue growth, 15.42% net profit growth), demonstrating strengthening growth momentum. The STAR Market, home to most semiconductor listed firms, recorded combined revenue exceeding RMB 365 billion across its 128 semiconductor enterprises in 2025, up 25% YoY, with net profit skyrocketing 83%, showcasing tangible achievements in high-quality industrial development.

All sub-sectors posted broad-based growth. Chip design led the expansion: 76 design houses delivered 32% YoY revenue growth and a staggering 268% jump in net profit, powered primarily by AI computing chips. Cambrian generated RMB 6.497 billion revenue in 2025, up 453.21% YoY, posting full-year net profit of RMB 2.059 billion for the first time. In memory chips, Montage Technology,

and leading players including Hwatsing Technology continue to achieve breakthroughs in etching, thin-film deposition and CMP equipment. Domestic semiconductor gear has advanced from "functional" to "high-performance".

Early 2026 data further validates resilient growth. General Administration of Customs figures show China’s integrated circuit exports hit USD 43.3 billion in the first two months of the year, surging 72.6% YoY, far exceeding the national overall export growth rate. Export volume climbed just 13.7%, yet average unit price jumped 52%, signaling a shift for Chinese chips from low-margin mass sales to high-value exports. The global semiconductor market also recovered, hitting a total scale of USD 791.7 billion in 2025 (+25.6% YoY). China’s domestic market surpassed USD 200 billion, accounting for nearly 30% of global volume and acting as the core engine of worldwide industry expansion.

II. Accelerated Globalization: From Domestic Substitution to Global Supply, Rewriting Supply Chain Landscape

The rise of China’s chips manifests not only in financial performance but also in comprehensive breakthroughs in global layout, gradually transforming China from a global chip transit hub to a core supplier. At present, Chinese chips are exported to over 160 countries and regions, accounting for 25% of global semiconductor market shipments in Jan-Feb 2026, forming a diversified and stable global supply chain network.

Mature manufacturing processes serve as China’s flagship export strength. While giants TSMC and Samsung fully focus on advanced 3nm/2nm nodes and drastically cut mature capacity above 40nm, over 70% of global automotive, industrial, home appliance and IoT applications face chip shortages. Chinese firms have seized this niche, concentrating R&D on 28nm–90nm mature processes. SMIC and Hua Hong Semiconductor keep expanding capacity, with monthly 12-inch wafer output exceeding 2.4 million pieces, capturing 25% of global supply. Seventy percent of all new global mature-process capacity is added in China. Boasting yields above 95%, production costs 30%-40% lower than overseas peers and consistent delivery schedules, Chinese mature-node chips have rapidly captured global market share and become the preferred supplier for enterprises across Europe, America, Southeast Asia and the Middle East.

Export structure upgrades toward high-value and diversified products. By region: Hong Kong (42.3%) functions as a global transit hub distributing chips worldwide; ASEAN markets (30%) see explosive demand, with exports to ASEAN jumping 128% in the first two months and China supplying 58% of its chip imports — Vietnam, Malaysia and Thailand stand as major buyers; EU markets (4%-6%) register steady demand for automotive and industrial chips with 28% growth; emerging markets in the Middle East, Latin America and Africa (12%) log the fastest expansion, matching local demand for AI infrastructure, smart cities and consumer electronics upgrades. By product, automotive-grade chips, power semiconductors and auxiliary AI chips dominate export volumes,

manufacturers such as NCE Power achieve automotive-grade chip yields exceeding 98%, deeply embedded within global new energy vehicle supply chains.

Self-sufficient supply chain capacity improves comprehensively. After years of technical research, China has built a full industrial chain covering design, manufacturing, packaging & testing, equipment and materials. Localization rates for mature-process chips stand close to 45%, exceeding 55% for 28nm nodes. On the equipment front, AMEC’s etching tools cover processes ranging from 65nm down to 3nm,

Hwatsing Technology realizes mass shipments in deposition and etching segments. On materials, Dragon Head CMP polishing pads and Shanghai Simgui 12-inch silicon wafers break foreign monopolies, pushing domestic substitution from isolated breakthroughs to full-chain rise.

III. Growth Drivers: Triple Catalysts of Policy, Market & Technology Lay Long-Term Development Foundations

The rapid expansion of China’s semiconductor industry is not a short-term windfall, but an inevitable outcome of overlapping policy support, market demand and technological innovation, laying solid groundwork for sustained high-quality growth.

Sustained policy dividends. The 15th Five-Year Plan lists integrated circuits as the top strategic emerging pillar industry. Phase III of the National IC Industry Investment Fund has been launched, leveraging trillions of social capital into the sector. Total investment in China’s semiconductor industry reached RMB 784.1 billion in 2025, up 17.2% YoY, with equipment and materials investment spiking 100.2% and 59.6% respectively, channeling capital precisely into core weak links. Meanwhile, tax incentives, R&D subsidies and talent support policies continue to expand, easing innovation burdens for enterprises.

Explosive market demand growth. Three domestic sectors — AI, new energy vehicles and consumer electronics — act as core growth drivers: China’s AI market size surpassed RMB 500 billion in 2025 with exponential demand surges for computing chips; new energy vehicle penetration exceeded 40%, pushing automotive semiconductor demand up over 35%; wider adoption of foldable screens and AR/VR devices revives demand for high-end chips. Amid the global supply chain de-risking trend, multinationals accelerate diversified procurement. Thanks to its complete industrial ecosystem and stable capacity, China has become a stabilizer for global supply chains, with massive order volumes shifting from South Korea and Taiwan to mainland China.

Leapfrog technological catch-up. In memory chips, Yangtze Memory holds over 1,500 3D NAND patents, surpassing Samsung to claim the world’s second-ranked technology position. Power semiconductors and advanced sensor tech outperform South Korean counterparts, while emerging tracks including RISC-V and 2D semiconductors are developed in parallel with global peers. Chinese chip firms are transitioning from technology followers to equal competitors, taking leadership in certain sub-sectors, evolving from rule-compliant participants into standard-setters.

IV. Future Outlook: Steady Progress Toward a Global Semiconductor Powerhouse

China’s semiconductor industry is currently at a pivotal stage of simultaneous volume and quality expansion. While gaps remain in advanced nodes, high-end EDA software and core equipment & materials, robust growth momentum and vast development potential persist. Short term, sustained release of mature-process capacity, persistent AI computing demand and dividends from global supply chain restructuring will drive double-digit growth in industrial revenue and profit through 2026. Long term, with full-chain technical breakthroughs, deepened domestic substitution and refined global layout, China will evolve from a semiconductor large country into a semiconductor powerful nation.

From domestic breakthroughs to global win-win cooperation, the steady advancement of China’s chips marks a landmark milestone for domestic tech self-reliance. It will inject stable momentum and diversified choices into the global electronics industry. Amid waves of global technological competition and collaboration, China’s semiconductor sector will stay committed to innovation, shore up weak links and strengthen competitive advantages. It will integrate deeper into global industrial chains with an open stance, share the fruits of technological progress worldwide, and deliver solid Chinese strength for digital economic growth and smart society construction.