China’s semiconductor firms, including SMIC and Hua Hong, have reported record revenue in 2025, with expectations for further surges in 2026. This growth has been fueled by strong demand from domestic tech giants, a shortage of memory chips, and U.S. export restrictions that have pushed Beijing to boost its homegrown tech industry. The restrictions have accelerated self-sufficiency efforts in China, leading to record revenues for companies such as Moore Threads and ChangXin Memory Technologies (CXMT).

Despite the record revenues, Chinese semiconductor firms still lag behind competitors in technological capability, particularly in producing the most advanced chips at scale. The export restrictions have posed challenges, but Chinese companies are actively working on creating domestic alternatives to overcome these barriers. The key to sustaining this growth lies in moving up the value chain into advanced technologies while avoiding overcapacity for less-advanced chips, according to analysts.