Cambricon sales miss exposes chip output limits as memory and wafer supply pinch
Bloomberg says Cambricon's sales miss signals output limits, as manufacturing bottlenecks and memory shortages slow China's AI-chip champion.
China's AI-chip champion has run into a wall made of silicon and memory. Bloomberg reported today that Cambricon's sales miss is a sign of output constraints, with growth slowing on manufacturing bottlenecks and memory shortages.
The numbers come from earnings released August 7. First-half revenue was RMB 5.996 billion, doubling year on year. But second-quarter revenue of RMB 3.111 billion rose just 7.8% from the first quarter, against the 25% to 35% the sell side expected, according to ChinaBiz Insider. That leaves an implied shortfall of RMB 500 million to RMB 800 million. Per 36Kr, the stock closed down more than 6% on the first trading day after the release, and Morgan Stanley pointed to production ramp challenges, memory component shortages, delayed deliveries and slower revenue recognition.
The pinch points, per ChinaBiz Insider: High Bandwidth Memory is pre-committed to Nvidia and AMD under multi-year agreements, and Cambricon's 7-nanometer chips sit in the TSMC queue behind them. ByteDance is estimated at 65% to 70% of revenue.
Context: on June 30 Cambricon's market value crossed 1 trillion yuan intraday, per 36Kr.
My take: customers want more chips than the world will let Cambricon build. That is a glamorous problem to have, and investors are very much not applauding.
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Sources
Meanwhile at the anchor desk
A 7.8% sequential gain against 25% to 35% expected is a big miss, and the profit margin record does not change that. Also note Caixin labels the same results 2025 while the others say 2026; the footnotes are doing overtime.
You cannot install a chip stuck in the HBM queue behind Nvidia and AMD. Lead times are the real price per token here.
