Author: Jiulin
Recently, multiple listed companies in the semiconductor industry have released their Q3 performance announcements.
We observed that ChangXin Memory Technologies (CXMT) achieved a cumulative revenue of CNY 269.024 billion in the first three quarters, with a year-over-year increase of 738.51%. Its net profit attributable to parent company shareholders reached CNY 132.040 billion, completing a dramatic turnaround from a massive loss last year to generating billions in profits this year. Domestic GPU companies such as Moore Threads and MetaX have also achieved profitability ahead of schedule. In the AIoT sector, Espressif Systems and Bestechnic showed diverging performance trends, indicating an inflection point for edge AI chip manufacturers.
Ranked by single-quarter net profit attributable to parent company shareholders among A-share semiconductor companies that have disclosed financial reports, CXMT leads with approximately CNY 54.435 billion, followed by GigaDevice Semiconductor with CNY 4.209 billion. CXMT's growth is staggering; for comparison, PetroChina reported approximately CNY 51.84 billion and China Merchants Bank reported approximately CNY40.03 billion during the same period.
The Q3 financial reports provide a window into observing the domestic semiconductor industry.
01、The Two Sides of Storage Price Increases
Overall, the construction of AI servers has driven demand for high-performance storage, while capacity adjustments by major global storage vendors have further impacted market supply. Amid tight supply-demand conditions and rising product prices, domestic storage manufacturers saw significant performance growth in the first three quarters. However, some manufacturers experienced a quarter-over-quarter decline in net profit in Q3, revealing differences in supply-demand positioning and profitability between original manufacturers and module makers.
Storage companies delivered the most prominent results. CXMT's Q3 revenue was CNY 118.714 billion, up 613.18% year-over-year and 19.30% quarter-over-quarter. Its net profit attributable to parent company shareholders turned positive year-over-year, increasing 3.01% quarter-over-quarter. For the first three quarters, the company's cumulative revenue was CNY 269.024 billion, with net profit attributable to parent company shareholders reaching CNY 132.040 billion.
CXMT explained in its report that rapidly growing global computing power demand and capacity adjustments by major manufacturers led to a shortage of DRAM products globally. Combined with continuous optimization of the company's capacity construction and product structure, sales volumes and prices rose significantly, driving revenue growth.
This highlights two directions: First, the global storage market is experiencing changes in demand and pricing. Although consumer electronics demand remains weak, server demand stays strong. TrendForce predicts that given limited new capacity from suppliers, the tight DRAM supply situation will persist through 2027, with average selling prices expected to rise in coming quarters. Second, beyond industry cycles, CXMT's own manufacturing capabilities and product structure are evolving. In the first half of 2026, DDR series generated revenue of CNY69.472 billion, accounting for 46.22%; LPDDR series generated revenue of CNY 78.191 billion, accounting for 52.02%. Compared to the first half, the proportion of DDR series products in total revenue continued to rise in the first three quarters.
CXMT's comprehensive gross margin for the first three quarters reached 86.85%. For Q4, CXMT expects its gross margin to remain stable, supported by two main factors: first, the continuation of the tight supply-demand landscape, with coordinated management of revenue and costs ensuring stability; second, the ongoing advancement of product generation upgrades.
International leaders judge the duration of supply tightness even longer. During the Q3 2026 earnings call, SK Hynix stated that the shortage of storage products could extend until 2030. The company has signed long-term agreements with 14 core customers, securing over half of its capacity for 2027 and 2028; including demands currently under negotiation, future three years' DRAM and HBM capacity through 2029 is "effectively sold out."
The boom in the storage industry also drove GigaDevice Semiconductor's performance growth. The company's revenue for the first three quarters was CNY 20.297 billion, up 197.11% year-over-year; net profit was CNY 11.066 billion, up 921.55% year-over-year. Revenue was about three times that of the same period last year, while net profit attributable to parent company shareholders was about ten times higher. The growth rate of profits significantly exceeded that of revenue. This scissors gap indicates that the increment mainly comes from "selling at higher prices," not just "selling more volume." GigaDevice also stated that during the reporting period, the storage chip industry faced tight supply, leading to simultaneous increases in volume and price for its storage chips, with the storage business continuing to improve.
Compared to original manufacturers, module makers did not maintain the same growth pace on a quarterly basis. BIWIN Storage Technology's revenue for the first three quarters was CNY 21.717 billion, up 230.30% year-over-year; net profit attributable to shareholders was CNY 8.768 billion, up 28,728.12% year-over-year. Longsys's revenue for the first three quarters was CNY 38.718 billion, up 131.37% year-over-year; net profit attributable to shareholders was CNY 14.322 billion, up 1,909.68% year-over-year. Deming Li's revenue for the first three quarters was CNY 28.555 billion, up 328.81% year-over-year; net profit attributable to shareholders was CNY 8.746 billion, up 32,399.91% year-over-year. However, Longsys and BIWIN saw their Q3 net profits decline by approximately 44% and 62% quarter-over-quarter respectively, while Deming Li only grew by 2.%.
Longsys provided a clear explanation: the revenue growth in the first three quarters was primarily driven by increased sales. In Q3, the global memory market supply-demand balance remained generally tight, but affected by the high price base from earlier periods, the price increases for DRAM and NAND Flash narrowed significantly compared to previous periods. The marginal contribution of rising storage wafer prices to the company's profitability slowed considerably.
Module makers are still aggressively stockpiling to enhance supply security. From January to September this year, Deming Li's inventory balance was CNY 28.986 billion, a surge of 310.66% from CNY 7.058 billion at the beginning of the year; new inventory added over nine months exceeded CNY 21.9 billion, accounting for 72% of Deming Li's total assets. The company explained that the expansion of enterprise-grade storage business scale and backlog orders drove stocking needs. BIWIN disclosed in its semi-annual report that it had signed two long-term raw material procurement agreements with storage original manufacturers, with a cumulative committed purchase amount of USD 3.3608 billion, to secure core raw material supplies for the next two years, of which enterprise-grade flash memory颗粒 accounted for USD 1.8608 billion.
Meanwhile, domestic module makers are increasing investment in controllers and firmware. Longsys disclosed that UFS 4.1 products equipped with self-developed 5nm controllers have entered mass production and shipment; BIWIN's self-developed eMMC controller has been mass-produced and delivered in multiple fields, and its UFS controller completed tape-out verification by the time of the semi-annual report. Deming Li also cited self-developed controllers and the increased proportion of enterprise-grade storage business as important factors in operational changes.
Controllers manage data reading/writing, error correction, and wear leveling in flash memory, while firmware affects product performance and reliability under different loads. Enterprise SSDs must adapt to long-running server environments, while mobile and wearable products prioritize power consumption and package size. Developing controllers and firmware independently helps manufacturers adjust products according to customer platforms.
Growing storage demand is also expanding to supporting chips. Montage Technology's Q3 revenue was CNY 2.079 billion and net profit attributable to parent company shareholders was CNY 1.240 billion, representing year-over-year increases of 46.0% and 162.0%, and quarter-over-quarter increases of 10.9% and 7.8% respectively. The company stated that AI inference and agent applications have increased demand for server CPUs, thereby driving shipments of memory modules and interconnect chips; the proportion of new sub-generation DDR5 RCD chips continues to rise.
02、Domestic Computing Power Expands Deliveries
As AI chip companies publish their results, computing infrastructure development has extended from product delivery scale to software and systems. Currently, Hygon Information Technology, Cambricon, Moore Threads, and MetaX have all released their financial reports.
First, let's look at the two giants of domestic computing power chips: Hygon and Cambricon. In terms of operating revenue, Hygon Information Technology leads with CNY 14.955 billion, up 57.58% year-over-year, roughly 1.57 times that of Cambricon. In terms of net profit attributable to parent company shareholders, Cambricon surpassed Hygon with CNY 3.715 billion, up 131.49% year-over-year; Hygon Information Technology reported CNY 2.847 billion, up 45.12% year-over-year. Regarding sustained performance growth, Hygon attributed it to rising domestic demand for high-end chips and continued volume ramp-up of CPU and DCU products; Cambricon attributed growth to market expansion and the implementation of AI applications. The statements from both companies jointly point to the expansion of application scope and delivery scale for domestic high-end chips.
Currently, the domestic AI chip market is forming a competitive landscape led by top-tier manufacturers with diverse technical routes developing together. On one hand, enterprises represented by Huawei leverage chip architecture, software ecosystems, and system integration capabilities to continuously expand in large-scale intelligent computing centers, internet, and industrial computing markets. On the other hand, companies like Hygon, Cambricon, Moore Threads, and MetaX are gradually forming differentiated product positioning, expanding applications in cloud computing, large model training, and inference.
Cambricon doubled both revenue and profit in Q3, and its cumulative performance for the first nine months also doubled, showing very steady growth. Particularly, the growth rate of net profit excluding non-recurring items significantly exceeded the revenue growth rate, indicating strengthening profitability of the core business.
In the first half of 2026, the landscape of the Chinese data center AI accelerator market changed noticeably. NVIDIA's market share dropped to 34%, followed closely by Huawei with 28%, shipping 572,000 units, nearly doubling year-over-year. Meanwhile, local players such as Alibaba's T-Head, Cambricon, and Kunlunxin saw their market shares continue to rise, with domestic AI chip manufacturers accelerating entry into the scaled delivery stage.
Huge demand for domestic AI chips has enabled domestic GPU companies to start making money early. In Q3, MetaX and Moore Threads collectively posted single-quarter revenues of CNY 1.5 billion. Their Q3 revenues were CNY 1.500 billion and CNY 1.552 billion respectively, up 367.12% and 1,773.92% year-over-year. Simultaneously, there were firsts in profitability: Moore Threads' Q3 net profit excluding non-recurring items was CNY 20.07 million, marking the first time its core business turned positive on paper; MetaX's Q3 net profit attributable to parent company shareholders excluding non-recurring items was CNY 308 million, up 261.63% year-over-year.
Enflame Technology is still catching up. Among the "Four Little Dragons" of domestic GPUs, Enflame has the lowest revenue and net profit, constantly chasing the other three. Enflame's Q3 revenue was CNY 1.212 billion, nearly quadrupling year-over-year, but it remains in a loss-making position, having not yet crossed the profitability threshold.
Notable on the inventory side, Cambricon's inventory stood at CNY 11.665 billion, an additional 41.43% increase from the end of Q2, with prepayments of CNY 3.044 billion and notes payable surging from CNY 351 million at the end of last year to CNY 4.966 billion. Hygon Information Technology had prepayments of CNY 5.885 billion and inventory of CNY 8.921 billion. Moore Threads' inventory was CNY 3.363 billion, an increase of CNY 2.031 billion from the end of last year. Enflame Technology's book inventory decreased slightly, but to guarantee deliveries and lock in upstream capacity, its prepayments reached CNY 7.709 billion, a 1,886% increase from the end of last year. The data proves the companies maintain high expectations for future demand.
03、AIoT: Cost Pressures Parallel New Product Ramp-ups
If AI chip manufacturers are striving to push chips into larger-scale systems, edge AI chip manufacturers face more fragmented product demands.
This year, the impact of storage price increases on edge AI chip manufacturers has been relatively significant.
Rockchip Electronics' Q3 revenue was CNY 1.573 billion and net profit attributable to parent company shareholders was CNY 473 million, up 43.57% and 90.49% year-over-year respectively, but down 5.88% and 10.68% quarter-over-quarter. The company stated that the impact of rising prices for production materials like storage and resistors/capacitors in the first half transmitted to the terminal market in Q3; tight PCB raw material supply and extended lead times affected terminal production, causing delays and postponements in some chip orders.
Rockchip specifically noted that the proportion of built-in storage in its products is very small. The impact mainly stems from customers' overall device costs and production arrangements. Even if master control chips are delivered on time, missing other components prevents terminal production. Given the wide variety and fragmented demand of AIoT products, the company believes it is more affected by PCB supply tightness than some mature industries.
Bestechnic also mentioned pressures from weak consumer electronics demand and storage price hikes. In Q3, the company's revenue was CNY 796 million, down 20.03% year-over-year but up 16.66% quarter-over-quarter; net profit attributable to parent company shareholders was CNY 44.43 million, down 77.42% year-over-year. Traditional peak seasons drove quarter-over-quarter demand recovery, but levels had not yet returned to those of the same period last year. When revenue declines, expenses like R&D cannot be reduced synchronously, further amplifying the drop in profits.
However, rising costs did not prevent all edge chip companies from growing. Amlogic's Q3 revenue was CNY 2.744 billion and net profit attributable to parent company shareholders was CNY 683 million, up 57.62% and 239.35% year-over-year respectively, and up 9.93% and 56.03% quarter-over-quarter respectively. Espressif Systems' revenue for the same period was CNY 889 million and net profit attributable to parent company shareholders was CNY 219 million, up 33.38% and 89.35% year-over-year respectively.
Amlogic disclosed that TV SoCs saw simultaneous increases in volume and price; price adjustments and product structure optimizations brought by co-packaged storage improved profitability. However, demand for its set-top box business remains suppressed by rising storage costs. Espressif stated that smart home demand remained relatively stable, while non-smart-home applications grew well, with the revenue proportion of high-performance products and non-smart-home businesses increasing.
New product plans disclosed by several companies also show that edge computing is forming different routes. Rockchip's RK182X coprocessor has entered the product launch and project mass production stages; the company expects volume ramp-up in Q4 and will continue advancing its "master control + coprocessor" layout. Amlogic's A311Y3 platform has entered mass production, extending to commercial displays, robotics, and AI NAS applications. Bestechnic's next-generation flagship wearable chip BES6100 completed tape-out during the reporting period and entered the customer sampling stage. Espressif's future R&D directions focus on three aspects: first, enhancing edge AI processing capabilities to meet more complex local computing and interaction needs; second, advancing Wi-Fi 7 smart terminal chip R&D to adapt to higher requirements for high-speed transmission, real-time performance, and low latency in future AI applications; third, further improving Bluetooth and other low-power connection technologies to cover more low-power, whole-house smart, and terminal interconnection scenarios.
04、Conclusion
With the resonance of AI computing power and cyclical recovery, high industry prosperity has translated into corporate performance. The domestic semiconductor industry achieved rapid growth far exceeding previous levels, with leading companies accelerating their expansion and storage leaders' performance standing out prominently.
As of October 30, a total of 173 A-share semiconductor companies had disclosed their Q3 reports. Among them: 143 companies achieved profitability in the first three quarters, accounting for over 80%; 86 companies achieved year-over-year performance growth in the first three quarters (excluding turnarounds), accounting for nearly 50%.
As the industry rapidly expands, companies with revenues and profits exceeding CNY 10 billion have emerged. As of October 30, according to disclosed Q3 reports: in the first three quarters of this year,12 A-share semiconductor companies had revenues exceeding CNY 10 billion; 3 companies had net profits attributable to parent company shareholders exceeding CNY 10 billion.
The title of "Net Profit King" ultimately belongs to the leaders who converted high prosperity into tangible wealth. This growth in China's semiconductor industry is transitioning from quantitative change to qualitative change.