- Cambricon plans to produce 500,000 AI accelerator chips next year
- The Siyuan 590 and 690 models total 300,000 units
- Current rates of return are still extremely low, only 20%
Chinese chipmaker Cambricon Technologies aims to triple AI chip production by 2026, seeking to fill the gap left by Nvidia’s withdrawal from the Chinese market.
Bloomberg reports that the company intends to produce approximately 500,000 AI accelerator chips next year, with 300,000 units made up of its flagship Siyuan 590 and 690 models.
This represents a sharp increase from the approximately 142,000 units expected by 2025, but Cambricon still faces significant manufacturing challenges.
Manufacturing challenges and performance limitations
The reported yield rate for its 590 and 690 chips is only 20%, meaning that only one in five chips produced is usable.
Even with access to Semiconductor Manufacturing International’s capacity, actual production could fall well below projections.
By comparison, TSMC’s 2nm technology, seven generations ahead of SMIC’s capabilities, achieves 60% performance, showing the efficiency gap.
Memory shortages, including HBM and LPDDR components, further threaten the ability to meet production targets, potentially slowing delivery to data center customers.
Cambricon’s move comes as Chinese companies such as Alibaba and ByteDance increasingly favor local suppliers.
They are backed by Chinese government incentives to push for semiconductor independence from China.
Cambricon’s reported revenue for the latest quarter increased fourteen-fold, demonstrating strong domestic demand and investor confidence.
However, this plan will put Cambricon in direct competition with technology giant Huawei, which plans to double its chip production, increasing pressure on Cambricon.
Both companies compete for similar wafers and manufacturing resources, creating bottlenecks that could limit production speed and scale.
Cambricon’s strategy relies heavily on the 7nm “N+2” process node at SMIC, but it is still uncertain whether it can sustain large-scale manufacturing.
Trade restrictions and chip embargoes over the past year have restricted access to high-end AI hardware, making domestic alternatives essential to national AI ambitions.
The gap between China’s current semiconductor technology and Western competitors such as Nvidia, AMD and Intel remains substantial.
Cambricon GPU chips are still far behind in performance and efficiency compared to global top-tier products.
CPU workloads in Chinese data centers may continue to rely on existing infrastructure while AI accelerators grow.
Integration of these new chips into workstations will likely be tested as companies adjust to the limitations of local hardware.
In a neutral assessment, Cambricon’s expansion shows the growing strategic importance of domestic AI chip production.
Strong government support and growing domestic demand fuel its momentum, but inefficiencies and competition for resources can limit its full potential.
Follow TechRadar on Google News and add us as a preferred source to receive news, reviews and opinions from our experts in your feeds. Be sure to click the Follow button!
And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form and receive regular updates from us on WhatsApp also.
