By Hamza Faisal

Chinese artificial intelligence chipmaker Cambricon Technologies nearly tripled its profit in the third quarter of 2026, riding a national push to replace Nvidia hardware — but a big revenue miss shows that even China's hottest chipmaker cannot build chips fast enough to meet demand.

Net profit for the three months ended September 30 surged 147.7 percent year on year to 1.4 billion yuan, about $210 million, up from 566.6 million yuan a year earlier, according to the Shanghai-listed company's stock exchange filing. Revenue more than doubled, rising 104.5 percent to 3.5 billion yuan, accelerating from the 75.8 percent growth recorded in the second quarter.

Shares of Cambricon closed up 5.5 percent at 932.2 yuan ahead of the earnings release on Friday, a sign investors had braced for a strong quarter. The company credited continued market expansion and its efforts to put AI applications into wider use, saying the top-line increase directly drove the profit surge.

A profit surge that still disappointed

The headline numbers hide a wrinkle: revenue of 3.53 billion yuan fell well short of the roughly 6.26 billion yuan analysts had expected, a miss of about 44 percent. Coverage of the results attributed the gap to supply constraints, including manufacturing bottlenecks and shortages of high-bandwidth memory, the specialised memory that AI accelerators need.

That tension — booming demand, constrained supply — runs through Cambricon's filing. The company said it maintained high inventory levels and prepayments to secure timely chip deliveries, yet third-quarter operating cash flow still came in negative, at minus 83.67 million yuan, reflecting heavy upfront outlays.

For the first nine months of 2026, Cambricon reported cumulative revenue of 9.53 billion yuan and net profit of 3.72 billion yuan. Morgan Stanley now pegs the company's share of China's AI chip market at about 14 percent, trailing only Huawei, according to coverage of the results.

Hygon's steadier quarter

Cambricon's rival Hygon Information Technology reported its own strong quarter earlier in the week. Third-quarter revenue reached 5.9 billion yuan, up 45.5 percent year on year, while net profit rose 37.9 percent to about 1 billion yuan.

For the nine months ended September 30, Hygon's revenue climbed 57.6 percent to 14.95 billion yuan, with net profit up 45.1 percent to 2.85 billion yuan. Research and development spending reached 4.47 billion yuan, nearly 30 percent of revenue, as Hygon continued developing processors and data-centre accelerators.

One analyst, Huatai Securities, noted that Hygon's third-quarter research spending jumped 60.3 percent year on year while its gross margin stood at 58.7 percent, and trimmed its share-price target even as it kept a Buy rating — a reminder that China's chip race is expensive to run.

The supply wall behind the boom

The momentum at both companies builds on Beijing's drive for a self-sufficient AI computing ecosystem. As Washington's export controls have cut off China's access to the most advanced accelerators from US chip giants, orders from Chinese enterprises have surged toward domestic silicon — and Cambricon's chips now power AI models from prominent Chinese labs including DeepSeek and Moonshot.

That demand is real, but so are the limits. Cambricon and Hygon must scale production while wrestling with restricted access to advanced manufacturing equipment and memory supplies. Until those bottlenecks ease, China's chipmakers may keep reporting the same paradox: profits soaring, forecasts missed, and customers waiting.

The next test comes quickly. With domestic AI labs still expanding and the country's telecom carriers redirecting capital spending toward intelligent computing, the fourth quarter will show whether China's chipmakers can turn today's demand into tomorrow's deliveries.