- Cambricon plans to produce 500,000 AI accelerator chips next year
- The Siyuan 590 and 690 models account for 300,000 units
- Current dividend rates remain extremely low at just 20%
Chinese chipmaker Cambricon Technologies aims to triple AI chip production by 2026, trying to fill the gap left by Nvidia’s retreat from the Chinese market.
Bloomberg reports that the company intends to produce approximately 500,000 AI accelerator chips next year, with 300,000 units consisting of its flagship Siyuan 590 and 690 models.
This represents a sharp increase from the roughly 142,000 units expected in 2025, but Cambricon still faces major manufacturing challenges.
Manufacturing challenges and yield limitations
The reported yield for its 590 and 690 chips is just 20%, meaning that only one in five chips produced is usable.
Even with access to capacity at Semiconductor Manufacturing International, effective output may fall far short of predictions.
In comparison, TSMC’s 2nm technology, seven generations ahead of SMIC’s capabilities, reaches a yield of 60%, showing the efficiency gap.
Shortages of memory, including HBM and LPDDR components, further threaten the ability to meet production targets, potentially delaying delivery to data center clients.
Cambricon’s move comes as Chinese companies such as Alibaba and ByteDance increasingly favor local suppliers.
They are supported by Chinese government incentives to increase China’s semiconductor independence.
Cambricon’s reported revenue for the last quarter increased fourteen-fold, showing strong domestic demand and investor confidence.
However, this plan will put Cambricon in direct competition with tech giant Huawei, which plans to double its chip output, increasing pressure on Cambricon.
Both companies compete for similar wafers and manufacturing resources, creating bottlenecks that can limit the speed and scale of production.
Cambricon’s strategy relies heavily on the “N+2” 7nm process node at SMIC, but whether it can sustain large-scale manufacturing remains uncertain.
Trade restrictions and chip embargoes over the past year have limited access to high-end AI hardware, making domestic alternatives crucial to national AI ambitions.
The gap between China’s current semiconductor technology and Western competitors such as Nvidia, AMD and Intel remains significant.
Cambricon’s GPU chips still fall far behind in terms of performance and efficiency compared to global top products.
CPU workloads in Chinese data centers may continue to rely on existing infrastructure while AI accelerators are scaled up.
Workstation integration of these new chips will likely be tested as companies adjust to local hardware limitations.
In a neutral assessment, Cambricon’s expansion shows the growing strategic importance of domestic AI chip production.
Strong government support and growing domestic demand are increasing its momentum, but inefficiencies and resource competition may limit its full potential.
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