Traditional Chinese Firms Expand Into AI Chip Sector

Chinese companies from traditional industries are increasingly entering the artificial intelligence semiconductor market, as seen in recent investments and expansions by food producers and established chipmakers.

Jinzi Ham, a company known for its ham products, announced in September 2025 that it would invest up to CNY 300 million (about USD 42.2 million) in the semiconductor industry through its subsidiary Jinzi Semiconductor. The company aims to acquire as much as a 20 percent stake in Leadingspeed Technology, which develops optical communication chips for AI, cloud computing, and 5G networks.

The planned investment will be carried out in two stages, beginning with an initial capital injection of CNY 100 million (USD 14 million) into Leadingspeed. A second phase of funding is planned, subject to certain conditions being met. Jinzi Ham established its semiconductor business in July 2025 after a change in controlling shareholder to Zheng Qingsheng, who is involved in real estate and car sales.

Leadingspeed Technology, founded in 2019 and based in Hangzhou, focuses on high-speed chip design for advanced computing and communications. In the first seven months of 2025, Leadingspeed reported revenue of CNY 511,100 (USD 71,840) and a net loss of CNY 20.4 million (USD 2.9 million.

What the numbers show

• Jinzi Ham posted CNY 22.9 million net profit and CNY 170 million revenue in H1 2025
• Cambricon’s revenue rose to CNY 2.9 billion in H1 2025, up 44 times year-on-year
• South Korean investors bought over USD 660 million in Chinese AI and chip stocks in early 2026

China’s government has set a target to triple domestic AI chip production by 2026. Companies such as Huawei and SMIC are expanding their manufacturing capacity, with Huawei planning to open three new AI chip plants by the following year and SMIC working to double its 7-nanometer chip output.

Cambricon Technologies, a leading AI chip designer, reported a net profit of CNY 1.03 billion in the first half of 2025, reversing a loss from the previous year. The company’s revenue increased to CNY 2.9 billion, and its stock price rose 383 percent in 2024, making it the top-performing stock in China that year. Cambricon completed a CNY 4 billion private placement in July 2025 to support its chip development projects.

China’s National Integrated Circuit Industry Investment Fund, known as “Big Fund II,” has invested more than CNY 60 billion in over 40 semiconductor companies. This includes a CNY 1.5 billion investment in Hangzhou Silan Microelectronics. The fund supports the development of domestic chip manufacturing and related technologies.

In early 2026, SMIC announced plans to acquire the remaining 49 percent of its subsidiary SMIC Ningbo for CNY 40.6 billion (USD 5.8 billion). Hua Hong Semiconductor also plans to acquire 97.5 percent of Shanghai Huali Microelectronics for CNY 8.27 billion (USD 1.2 billion). These moves are part of a state-backed effort to consolidate the sector, strengthen national champions, and increase capacity at mature process nodes.

International interest in Chinese AI and semiconductor firms has grown, with South Korean retail investors purchasing over USD 660 million in Chinese chip-related stocks between January and February 2026. MiniMax AI and Montage Technology were among the most purchased companies during this period.

* This article is based on publicly available information at the time of writing.