4December2025

ChinaSemiconductors

ChinaAI:SupplyChainUpsideTakesCenterStagein2026,

upgradeCambricontoOutperform

QingyuanLin,Ph.D.

+85221232654

qingyuan.lin@

ZhengCui

+85221232694

zheng.cui@

FrancisMa

+85221232626

francis.ma@

China’sAI-relatedstockshavedeliveredastrongperformancethisyear,momentumpartly

fueledbyDeepSeekandlocalAIchipadvancements.Afterarobustrun,themarkethas

recentlyenteredaconsolidationphasesinceOctober,withsomeconcernstartingabout

thesustainabilityofChinaAI.Inthiscall,weupdateourChinaAIchipsupplyanddemand

model,andbelievethatthesupplychainupsidewilltakecenterstagein2026.Outperform

onalloursemicap,AIfablessandfoundrynames.

It’sjusttheendofthebeginningforChina’sAIstory,wedon’tthinkAIisabubbleinChina.2025hasbeenagoodyearforChinaAIinitiatedbyDeepSeek,butfromthe

perspectiveofsupplychaindevelopment,China’sAIstoryisonlywrappingupitsinitial

chapter.WeexpectChinaCSPandTelcototalcapextogrowat13%CAGR(

Exhibit4

),

withAIcapexgrowingat25%CAGRthrough2028andlandingatUSD172bnbythen

(

Exhibit5

).Importantly,thisspendingisstillhealthy:forthelistedplayerstotalcapexis

only40-60%oftheirfreecashflow,or~17%oftheirrevenue.MajorCSPshavealready

signaledupwardrevisionstotheircapexplans,themajorityofwhichwillbeallocatedtoAI,creatingUSD88bnofAIchipdemandby2028.

Thedomesticsupplychainisgearingupquicklytomeetthissurgingdemand.

Currently,thebiggestbottleneckliesinconstrainedlocaladvancedlogicproduction

capacity,whichhaslimitedtheoutputoflocalAIchips.However,ourchannelchecksrevealacriticalturningpoint:advancedlogiccapacityshouldstartacceleratingin2026/27

(

Exhibit12

).Giventhetypical3-4quarterlagfromfoundryproductiontoAIchipsales,thiscapacityadditionwilltranslateintoasharpsurgeinlocalAIchipsalesin2027/28(

Exhibit

14

).By2028,weanticipatethesupplyoflocalAIchipwillgrow5Xcomparedto2025,andthemarketwillachieveasupply-demandbalance.Notably,wedonotexpectNVIDIAto

resumesalesinChinaamidtheongoing“backdoor”investigation,asaresultlocalplayersareexpectedtocapture>90%ofthemarketshareby2028.

LeaderswithintheChinaAISupplyChainwillbenefit.Weforecastabroadrallyacross

China’sentireAIsupplychainin2026,rankAIchip>Semicap>Foundry.AIchipvendors

suchasCambriconandHygonaredirectbeneficiaries,asearlyadopteroflocalfoundry

theyhavesecuredsufficientadvancedlogiccapacitytofuelthefastgrowthinthenextfew

years.WereviseupCambriconrevenueprojectiontoreflectthat,andupgradethestock

toOutperform.SemicapstockssuchasNAURA,AMEC,Piotech,bycontrast,aremore

defensivewiththemostreasonablevaluations.Semicapcompaniesnotonlybenefitfrom

theexpansionofadvancedlogicbutalsoenjoyupsidefromtheshiftinmemorydemand

towardlocalsuppliers—especiallyforHBM.Theymaynotofferthelargestshort-term

gains,buttheyshoulddeliverhighlyresilientreturns.FoundrieslikeSMIC(theprimary

supplierofAIchipmanufacturingcapacity)andHualishouldalsobenefit,whichwillinturn

supportSMICandHuaHong’sstockprice;however,weexpecttheirstockswillbemainly

drivenbymarketsentimentgiventheiralreadyrelativelyhighvaluations.Othersupply

chainplayersbeyondourcoverage,includingthosefocusedonCoWoS,HBM,networking,

andserverassembly,shouldalsoshareinthegrowth.Werateallthesesegments

Outperform,withCambriconandNAURAasourtoppicks.

SeetheDisclosureAppendixofthisreportforrequireddisclosures,analystcertificationsandother

importantinformation.Alternatively,visitour

GlobalResearchDisclosureWebsite

.

FirstPublished:03Dec202521:30UTCCompletionDate:03Dec202515:19UTC

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

BERNSTEINTICKERTABLE

3Dec2025

TTM

ReportedEPSReportedP/E(x)

Ticker

Rating

Cur

Closing

Price

Target

Rel.

Perf.

Cur2024A2025E2026E

2024A2025E2026E

Price

688012.CH(AMEC)

O

CNY

259.48

380.00

(1.2)%

CNY

2.61

2.57

4.15

99.4

101.2

62.6

688256.CH(Cambricon)

O

CNY

1,332.30

2,000.00

110.7%

CNY

(1.09)

5.38

11.26

N/M

247.5

118.3

OLD

M

1,100.00

4.73

10.00

1347.HK(HuaHong-H)

O

HKD

73.95

100.00

239.4%

USD

0.19

0.03

0.05

50.1

280.8

174.4

OLD

60.00

0.04

688347.CH(HuaHong-A)

O

CNY

105.44

140.00

92.3%

USD

0.19

0.03

0.05

78.7

440.7

273.8

OLD

85.00

0.04

688041.CH(Hygon)

O

CNY

210.14

280.00

44.6%

CNY

0.83

1.35

2.42

253.2

155.7

86.9

OLD

220.00

1.33

2.20

002371.CH(NAURA)

O

CNY

433.85

600.00

21.4%

CNY

7.83

9.03

12.22

55.4

48.0

35.5

OLD

480.00

688072.CH(Piotech)

O

CNY

288.00

375.00

28.6%

CNY

2.48

3.52

6.64

116.1

81.8

43.3

981.HK(SMIC-H)

O

HKD

67.20

100.00

135.4%

USD

0.11

0.06

0.08

75.8

139.2

108.1

OLD

30.00

0.07

0.09

688981.CH(SMIC-A)

O

CNY

111.62

150.00

4.9%

USD

0.11

0.06

0.08

138.7

254.5

197.6

OLD

110.00

0.07

0.09

ASIAX

1,605.60

RATINGCHANGE/PRICETARGETCHANGE/ESTIMATECHANGEINBOLD

O-Outperform,M-Market-Perform,U-Underperform,NR-NotRated,CS-CoverageSuspended

1347.HK,688347.CH,981.HK,688981.CHbaseyearis2023;

Source:Bloomberg,Bernsteinestimatesandanalysis.

INVESTMENTIMPLICATIONS

Cambricon(688256CH):AsthekeybeneficiaryoftheAIchipsupplysurge,weupgradeCambricontoOutperformwithPTCNY2,000,basedon2027EEPSofCNY21.80and90xP/E(PreviouslywasMarket-Perform,110xP/Eat2026EEPSRMB10.00,PTCNY1,100).

Hygon(688041CH):WerateHygonOutperformwithPTCNY280,basedon2027EEPSof3.48and80xP/E.(Previouslywas

Outperform,100XP/Ebasedon2026EEPSRMB2.20,PTCNY220).

HuaHong(1347HK,688347CH):WerateHuaHongOutperformwithH-sharePTHKD100andA-sharePTCNY140,basedonaverageNTM+1BVPSof3.98USD,and3.2xP/Bwith1.5xA-Hpremium(Previouslywas2.0XP/BforHshare&assume

55%A/HpremiumforAshare,basedonourestimateofNTMaverageBVPSofUSD3.78,PTforHshareatHKD60andAshareatCNY85).

SMIC(981HK,688981CH):WerateSMICOutperformwithH-sharePTHKD100andA-sharePTCNY150,basedon

averageNTM+1BVPSof2.81USD,and4.2xP/Bwith1.7xA-HPremium.(PreviouslywasH-shareat1.5xNTMP/Bmultiple

withaA-Hpremiumof3.7x,basedonnext-four-quartersbookvalueexcludingintangibleassetsandgoodwillofUSD2.64per

year,withaPriceTargetofHKD30/CNY110forH/A-share).

NAURA(002371CH):WerateNAURAOutperformwithPTCNY600.00byraisingourmultipleto37xfrom29xbasedon

unchanged2027EEPSof16.04.

AMEC(688012CH):WerateAMECOutperformwithPTCNY380.00.

Piotech(688072CH):WeratePiotechOutperformwithPTCNY375.00.

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP2

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP3

KEYHIGHLIGHTSOFTHEREPORT

AIchipdemand:WeexpectChina’sAIcapextogrowat25%CAGRfrom‘25to‘28,andChina’sAIchipdemandisprojectedto

reachUSD88bnby2028.

AIchipsupply:Nvidia’sH20chipisbannedbytheChinesegovernmentduetothe‘backdoor’concern,pushinglocalCSPsto

switchtolocalAIchipvendors,whiletherapidadvancedlogiccapacityexpansionshouldallowthelocalAIchipsupplytogrow

at74%CAGRfrom‘25to‘28.

Keycatalysts:1)DeepSeekorotheralgorithmdeveloperscomingupwithadditionalinnovationthatimpresstheworld;2)

MajorCSPprojectevenbiggeropportunityinAIandfurtherreviseuptheircapexplan;3)Morenewsfromsupplychainaround

fastercapacityexpansionforadvancedlogicandmemoryinthesector.

Keyrisks:1)BiggestdownsideriskwillbeifNvidiaresumessalesinChina,withbetterchipthanwhatthelocalvendorscan

provide,wethinkit'sunlikelygiventheChinesegovernment’sdedicationtosupportingthelocalsupplychainbutisstillpossible;

2)IftheUSAIstockscrashthentheChineseAIstockswouldlikelyalsocrash,ChinastocksarenotimmunetoapotentialAI

bubbleburst;3)China’sadvancedlogicsupplychainisstillnotfullyself-sufficient,inanextremecaseafulldecouplewouldstill

delayChina’scapacityexpansioninadvancedlogic.

Pickingorder:Bysector,werankAIchip>Semicap>Foundry.1)AIchip:ThestrongdemandfromlocalCSPandthesurge

oflocalAIchipsupplyshouldallowallAIchipvendorstocapturestronggrowth,welikeCambriconmoreduetostronger

growthmomentum;2)Semicap:Capacityexpansionrequirelocalvendorstosupportcrucialequipmentthatarebannedby

USgovernment,welikeNAURAasmajorsupplierforadvancedlogic;3)Foundry:Localfoundryiscrucialinsolvingthesupplybottleneckandrevenuewillgrowfast,howeverprofitabilityisaconcern;welikeSMICwithhighercertaintyinadvancedlogiccapacityexpansion.

EXHIBIT1:WeexpecttherapidaccelerationinlocalAIchipproductioncapacitywillallowdomesticAIchipsalesto

grow5Xinthenextthreeyears

ChinaAIChipSalesbyGlobalvsLocalVendors(USDbn)

,23-,25CAGR

88

GlobalVendor

6

8%

+49%

45

6

DomesticVendor

165%

82

+52%

26

11

16

24

21

39

5

11

15

9

19

2

6

2023

19%

2025E

58%

2026E

79%

2027E

88%

2028E

93%

2024

Self-sufficiency

(DomesticShare)

29%

,25-,28CAGR

-17%

74%

Source:companyreports,Bernsteinanalysisandestimate

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP4

DETAILS

CHINAAICHIPDEMAND

China'sAIacceleratormarketisexperiencingfastgrowthpostDeepSeek,withmanyprivateandpubliccustomersbuyingAIchipstobuilddatacenters,asaresultChina'sAIchipdemanddemonstratesmorefragmentationcomparedtotheU.S.(

Exhibit

2

).Wegroupthechipbuyersintofourgroups:

1.Internet/CloudServiceProviders/Telco(majorbuyer)

?KeyPlayers:ByteDance,Alibaba,Tencent,Huawei,Baidu,ChinaMobile,ChinaTelecom,ChinaUnicometc.

?UsagePattern:Buildcloudinfrastructureandalsoconsumeinternallyforproprietarymodels

2.AICompanies

?KeyPlayers:DeepSeek,iFlyTek,SenseTime,MoonshotAI(Kimi),etc.

?UsagePattern:PrimarilyrentfromCSPswhilebuildingselectiveon-premisecapabilities

3.Automotive/MobileOEMs

?KeyPlayers:BYD,NIO,XPeng,LiAuto,Xiaomi,Geelyetc.

?UsagePattern:Hybridcloudandon-premiseapproachforedgeapplications

4.Third-partyDatacenters/MaaSVendors

?KeyPlayers:RangeTechnology,GDS,SiliconFlow,government-backedandSOE-supportedAIdatacenters

?UsagePattern:Buildinfrastructuretoleasecomputingpowertocustomers.MostoftheGovernmentledinvestmentgoestogovernment-backedAIdatacenters.NotethatmanySOEcapexspendingareinthisbucket,theydon’tbuilddatacenterontheirownbutusuallyspendcapextobuytheAIchipsandaskthirdpartyvendor(suchasTelcocloud)tohelpwithmanagingtheon-premisedatacenteroperationandAIusecasedeployment.

Wesummarizethetotalcapex(

Exhibit4

)andAIcapex(

Exhibit5

)bythemajorplayersinChina.Notethatthecurrentprojectionfrommajorinternetplayersindicatesthattheyarelikelystillsupplyconstrained,sowhenChina’ssupplyfurtherrampsuptherecouldbeupsidetoourprojection.WebelievethegovernmentsupporteddatacentersaretheonesthataremostunderestimatedinChina.Per

newsrelease

,during1H25themarketsawover40localAIdatacentertenderprojectswithanaveragescale

ofoverRMB10mn,withthelargestprojectoverRMB7.2bn(

Exhibit3

).Weexpectlocalgovernment/SOEssupporteddatacenterstoaccountfornearly25%ofdomesticAIcapex.

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP5

EXHIBIT2:MajorAIAcceleratorsbuyerinChina

Source:Bernsteinanalysis

EXHIBIT3:ThereweremanylocalAIdatacenterstenderprojectsemergingYTD(non-exhaustivelist)

Release

Date

Projectname

Purchaser

Successfulbidders

Bidding

amount

(RMBbn)

Notes

Originarea

17-Jan

EPCgeneralcontractingforthefirstphaseofthe

DelinghaIntelligent

ComputingCenterprojectinQinghai

QinghaiZhisuan

TechnologyCo.,Ltd.

ChinaRailwayFourthEngineeringGroupEngineeringOperationandMaintenanceCo.,Ltd.(includingconsortium:China

AviationPlanningandDesignResearchInstituteCo.,Ltd.)

1.46

Thefirstphasewillbuild4000PFlopscomputingpower,withaconstructionareaofabout

96150m2.Itwillbuild1demonstrationplatformcomputerroombuilding,2datacentercomputerroombuildings,1operationandmaintenanceR&Dbuilding,and1operationandmaintenanceshiftbuilding;accordingtothenationalA(T3+)standard,a4350-rackcabinetdatacenterwill

bebuilt,withasinglecabinetpowerof8KW~24KW;a110KVsubstationandrelatedsupportingfacilitieswillbebuilt

Delingha,Qinghai

17-Feb

EPCgeneralcontractingfor

thefirstphaseoftheHebeiArtificialIntelligence

ComputingCenter

HebeiZhongkeSuperCloudComputing

Co.,Ltd.

ChinaConstructionFifthEngineering

BureauInstallationEngineeringCo.,Ltd.

(Consortiummembers:ChinaConstructionFifthEngineeringBureauCo.,Ltd.,

ShenzhenZhongkeSupercomputingTechnologyCo.,Ltd.)

3.21

ThefirstphaseoftheHebeiArtificialIntelligenceComputingCenterEPCgeneralcontractingprojectincludesthedecorationandrenovationoftheB1officebuilding,theconstructionoftheC1buildingcomputingcenterengineeringandtheconstructionofcomputingfacilities

Baoding,Hebei

1-May

IntelligentComputingCenterProjectofXinjiangRuicun

InformationTechnologyServiceCo.,Ltd.-(EPCgeneralcontracting)

XinjiangRuicun

Information

TechnologyServiceCo.,Ltd.

ChinaNuclearIndustryZhongyuan

ConstructionCo.,Ltd.(includingconsortiumChinaCoalTechnologyandEngineering

ChongqingEngineeringTechnologyCo.,

Ltd.,ChengduErbaInformationTechnologyCo.,Ltd.)

2.19

Onenew1#comprehensivebuilding,3floorsaboveground,1floorunderground,witha

constructionareaof4722.84squaremeters;one2#intelligentcomputingbuilding,1floor

underground,3floorsaboveground,withaconstructionareaof4654.47squaremeters;41#,2#,3#4#datacomputerrooms,1flooraboveground,eachwithaconstructionareaof1603.7squaremeters.Totalconstructionareaof15792.11squaremeters

Horgos,Xinjiang

10-May

ComputingCenterProjectofShuangheZhongshuyun

IntelligentComputing

TechnologyCo.,Ltd.-(EPCgeneralcontracting)

Shuanghe

Zhongshuyun

ZhisuanTechnologyCo.,Ltd.

WuhanMunicipalConstructionGroupCo.,Ltd.(includingconsortiumChinaCoal

TechnologyandEngineeringChongqingEngineeringTechnologyCo.,Ltd.)

1.92

Shuanghe,Xinjiang

12-May

UsuIntelligentComputingCenterConstructionProjectSection1

XinjiangChuangqiZhisuanInformation

TechnologyCo.,Ltd.

ChinaRailwayConstructionBridgeEngineeringBureauGroupCo.,Ltd.

1.29

3newbuildingswithatotalconstructionareaof6910squaremeters,includingintelligent

computingcenter,firepoolpumproom,guardroom,etc.;1newautomatedproductionlinewithanannualoutputof10,000networkcabinets;purchaseandinstallhigh-performancecomputingpower,high-performancestorageandotherrelatedequipment,supportingpowerandother

relatedancillaryprojects

Wusu,Xinjiang

16-Jun

Generalcontractingforthe

constructionofXinjiang

XinjiangWankaHub

IntelligentComputingCenterProject

UrumqiJiangsuanTechnology

DevelopmentCo.,Ltd.

ChinaConstructionThirdEngineeringBureauGroupBeijingCo.,Ltd.

7.20

Thisprojectplanstobuildintelligentmanufacturingrelatedserviceindustrybuildings,artificialintelligencetrainingbasesandAintelligentcomputingroomandsupportingfacilities.The

intelligentcomputingcenterprojectplanstopurchaselargemodeltrainingandreasoning

trainingserverswithacomputingpowerrequirementof20000P,ofwhichnolessthan30%ofdomesticcomputingpowerchipssupportlargemodelsandreasoningtrainingneedsofartificialintelligence.Theprojectcoversanareaof100acresandaconstructionareaof39890.18

squaremeters

Urumqi,Xinjiang

Source:Newsrelease,Bernsteinanalysis

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP6

EXHIBIT4:ThetotalcapexofChinaCSP/TelcosshouldreachUSD267Bnby2028,withinternetgiants

demonstratingfastergrowth

TotalCapexbyMajorChinaCSP&Telco(USDbn)

267

+13%

239

99

207

SOEs&Others

95

183

+23%

Huawei

18

89

143

57

4

Baidu

82

14

11

12

121

46

ChinaUnicom

4

15

16

11

ChinaTelecom

30

16

27

45

9

3

8

ChinaMobile

38

27

15

23

36

7

13

2

13

12

Tencent

11

6

3

23

11

21

12

15

21

Alibaba

13

26

13

22

18

11

10

ByteDance

4

4

28

11

8

202320242025E2026E2027E2028E

Source:Bloomberg,Bernsteinanalysis

EXHIBIT5:ForAICapexparticularly,ChineseCSPswillinvestUSD172Bnby2028,representing64%oftheirtotalCapex.MostoftheincrementalCapexareforAIthusAIcapexisgrowingfaster.Internetgiantsdisplayanevengreaterappetiteforexpandingcomputingpower.

ChinaAICapexBreakdownbyCompany(USDbn)

172

+25%

37

17

143

34

SOEs&Others

Huawei

111

27

Baidu

4

7

ChinaUnicom

13

8

4

88

21

ChinaTelecom

6

14

+61%

60

6

ChinaMobile

10

11

3

14

26

5

7

Tencent

4

7

3

4

13

Alibaba

3

10

11

17

14

5

6

2

2

21

34

2

2

2

2

3

11

14

21

5

9

45

3

36

ByteDance

3

28

8

5

4

11

202320242025E2026E2027E2028E

Source:Bloomberg,companyreport,Bernsteinanalysis

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP7

WebelieveChina’sAIspendingishealthyandcouldseefurtherupwardrevisioninthenextfewyears.In2025,ChinaAIcapexisabout88bn(abouthalfoftotalCapexasmostofthecapexforTelcoandSOEon-premise),andthat’sonly18%ofUStotalCSPcapex(

Exhibit6

,assumemostofthatwillbeforAI).ForpublicCSP,wecomparethetotalcapexspendingwiththeoperating

cashflow(

Exhibit7

)andrevenue(

Exhibit8

),andfindthatChinaAIspendingishealthywith40-60%ofOPcashflowand

12-17%ofrevenuegoestototalcapex,withfurtherroomforadditionalinvestment,andbothratiosarelowerthanUSpeers.

EXHIBIT6:ThetotalcapexofUSCSPandNeoCloudplayersisestimatedtoreachUSD805Bnby2028,reflectinga

fasterCAGRthanthetotalcapexofmajorCSPsinChina.

TotalCapexbyMajorUSCSP(USDbn)

805

161

+18%

769

Others

678

136

154

IREN

6

20

22

6

NBIS

20

13

70

121

121

127

156

49

CoreWeave

11

36

4

+60%

26

488

98

2115

Oracle

121

114

128

META

1

4

109

Microsoft

292

58

97

115

145

70

0

1

9

65

191

38

7

0

1

3

9

37

Google

44

92

27

32

28

53

165

Amazon

83

123

53

202320242025E2026E2027E2028E

Source:Bloomberg,Bernsteinanalysis

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP8

EXHIBIT7:TheCAPEXtoOperatingCashFlowratioforCSP&NeoCloudplayersinbothChinaandtheUSwill

remainmanageableinthecomingyears.However,ChineseCSPspursueCAPEXinvestmentsmorerationallythantheirUScounterparts,allowingforincreasedflexibilityinallocatingfundstoprocuringmoredomesticAIchips.

CAPEXtoOPcashflow%oflistedCSP&NeoCloudplayersinChinaandUS

78%

74%

ChinalistedCSPtotalUSlistedCSPtotal

69%

65%

59%

58%

54%49%

55%

43%

49%42%

202320242025E2026E2027E2028E

Source:Bloomberg,Bernsteinanalysisandestimate

EXHIBIT8:TheCAPEX-to-Revenueratiodemonstratesasimilartrend.WhileChineseCSPspossesssufficient

financialresources,remainingconstrainedbytheongoingsupplyshortageofAIchips.

CAPEXtorevenue%oflistedCSP&NeoCloudplayersinChinaandUS

30%29%

27%

24%

ChinalistedCSPtotalUSlistedCSPtotal

17%

17%

13%

13%

16%14%

12%12%

202320242025E2026E2027E2028E

Source:Bloomberg,Bernsteinanalysisandestimate

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP9

CHINAAICHIPSUPPLY

UnlikeintheUSwherechipsupplyisdominatedbyNVIDIA,andmanyleadingCSParedevelopingtheirownASIC,inChinathecompetitivelandscapeforAIchipsarealsomorefragmented,whichcanbesegmentedintofourgroups(

Exhibit9

),serving

differenttypesofcustomers(

Exhibit10

)andsignificantvarianceonchipperformance(

Exhibit11

).

1.GlobalGPGPUvendors

?KeyPlayers:NVIDIA,AMD,Intel

?Majorcustomers:MajorCSPslikeByteDance,AlibabaandTencent

2.DomesticGPGPUvendors

?KeyPlayers:Hygon(DCUseries),MetaX(Cseries),MooreThreads,etc.

?Majorcustomers:CSPs,SOEs&localgovernmentsupporteddatacenters

3.DomesticthirdpartyASIC

?KeyPlayers:Ascend(910series),Cambricon(SiyuanSeries),Enflame,etc.

?Majorcustomers:SOEs,ByteDance,CSPs,etc.

4.DomesticCSP-developedASIC

?KeyPlayers:AlibabaT-head,BaiduKunlun,TencentZixiao

?Majorcustomers:CSPsthemselves,sometimesSOEs/localgovernmentprojects

WeestimatethatthecomputingperformanceforChinadomesticAIchipsisstilllaggingfarbehindthebestchipsfromNVIDIA&AMD,butiscompetitivewiththechipsthattheycanselltoChina(NVIDIAH20andAMDMI308).WeuseTPPasaproxyto

evaluatethesinglechipperformance(

Exhibit11

),andfoundthatAscend910Cisatthetopofdomesticchipperformance,

approximately80%ofH100performance(withdualdiedesignsonotappletoapplecomparisonwithH100),althoughthe

actualcomputingpowerperformanceislimitedbytheinfrastructurecompatibilitywithCUDAformanyAIchipusers,thus

thecommercialmomentumisnotidealin2025.TheotherTier1thirdpartyvendorsareCambricon(Siyuan590)andHygon

(BW1000orDCU3),astheyareaboutsameperformanceasNVIDIAA100.RecentlyBABAandBaidustarttotalkmoreopenlyabouttheirin-housechipperformance,BABA’slatestchipPPU2.0mighthavesimilarperformancewithAscend910C(also

dualdiedesign),althoughwearenotsureiftheyarealredyinvolumeproduction.Baidu’sKunlunchipisalsogoodandstarttogetsomeearlymomentumfromothercustomersbeyondBaidu(suchasTencent,althoughstillverysmallvolume).NotableTier2playersareMetaX,Illuvatar,MooreThread,Biren,allofwhichareseekingforIPO.

Notethatallthesechipsnowareonlycapableofinferencing,withoutnetworkingthesechipscannotperformtraining.However,HuaweiismakingimpressiveinnovationsaroundnetworkingandintheirroadmaptheyplantobuildSuperPoDsthatareeven

morepowerfulthanNVIDIA’s(seethelaunchof

CloudMatrix384

,and

Huawei’slatestAIroadmap

).Webelievethetraining

demandwillonlyaddtotheinferringdemandthatfurtherboostspotentialinthelocalAIsupplychain.NotethatlocalAIchip

vendorshavebeenaggressivelyinvestingR&DfornewAIchipmodelsoverthepastfewyears,andgivenUSexportconstraintsweexpectthelocalAIchipswillbecomeincreasinglycompetitivecomparedtothechipsfromgloballeaders.

QingyuanLin,Ph.D.+85221232654qingyuan.lin@4December2025

CHINASEMICONDUCTORSBERNSTEINlsocIeTecENeRAlECROUP10

EXHIBIT9:Intermsofsupply,thecompetitivelandscapeisalsoverycomplex.However,besidesglobalGPGPU

vendors,HuaweiAscend,CambriconandHygonareseenasTier1domesticsuppliers,whileBABA’sTheadand

Baidu’sKunlunareconsiderthebestASICchipproviders.

GlobalGPGPU

intel

DomesticGPGPU

DomesticASIC

Self-developedASICbyCSP

Tencent騰訊

MajorAIchipvendors

Source:Bernsteinanalysis

EXHIBIT10:MajorsellersandbuyersfortheChinaAIchipmarket

Customers

Suppliers

盒

e2

Tencen廣騰訊

lnolByteDance

24libabacom

Tencen廣騰訊

LocalGovernment

/