The Country Most Hated by Trump is Profiting in the AI Era, with the US Losing Out!

Jakarta, CNBC Indonesia - China’s semiconductor industry reported its highest revenue on record last year, spurred by a surge in artificial intelligence (AI) demand, memory chip shortages, and pressure from United States (US) export restrictions. Washington’s policies have instead prompted Beijing to massively strengthen its domestic technology industry. Analysts and industry players project that the revenue surge will continue this year. This underscores how chip players in the Land of the Bamboo Curtain have capitalised on strong demand from domestic tech giants racing to build their AI infrastructure. Citing CNBC International and Bloomberg on Sunday (05/04/2026), Paul Triolo, a partner at Albright Stonebridge Group, explained that US export restrictions on China’s technology sector in recent years have acted as ‘rocket fuel’ for chip demand. According to him, this has bolstered growth in other sectors such as electric vehicles and AI data centres. ‘US export restrictions in recent years have added ’rocket fuel’ to chip demand, strengthening growth in other fields like electric vehicles and AI data centres,’ Triolo said. China’s largest chip giant, Semiconductor Manufacturing International Co. (SMIC), reported 2025 revenue jumping 16% from the previous year to a record US$9.3 billion (Rp158.1 trillion). Based on LSEG analyst estimates, the company’s revenue is even projected to surpass US$11 billion (Rp187 trillion) in 2026. Strong performance was also seen in other Chinese chip makers, with Hua Hong recording fourth-quarter revenue at a record US$659.9 million (Rp11.21 billion). The company projects future sales targets to remain stable in the range of US$650 million to US$660 million. Meanwhile, Moore Threads, which aims to rival Nvidia giant, provided guidance that 2025 revenue will be in the range of 1.45 billion yuan to 1.52 billion yuan (Rp3.5 trillion to Rp3.6 trillion). This figure reflects a fantastic annual increase of 231% to 247%. Triolo further explained that growth in electric vehicles and related infrastructure has supported demand for ‘mature node’ chips or less advanced technology. However, on the other hand, demand for more advanced chips has skyrocketed due to the exploding AI trend. ‘Growth in electric vehicles and related infrastructure has provided support for mature node semiconductors that are less advanced, while demand for more sophisticated chips has surged dramatically due to AI,’ Triolo stated. US restrictions that cut off China’s access to key technologies have accelerated Beijing’s drive for self-reliance to break free from dependence on American technology. The latest US move to restrict Nvidia chips to China has instead pushed Beijing to encourage local companies to buy domestic alternatives, where firms like Huawei are starting to fill the void, although their performance still lags behind US products. Parv Sharma, senior analyst at Counterpoint Research, offered his view on the situation. He assessed that although China has not yet led in peak GPU performance, domestic solutions have successfully filled the domestic computing gap and driven record revenues for local companies. ‘Although China has not yet led in peak GPU performance, domestic solutions fill the ’computing gap’ domestically and drive record revenues,’ Sharma said. China’s memory chip sector is also reaping windfall gains. Memory, a key component for AI data centres and consumer electronics, is currently facing a global shortage while demand remains high, triggering unprecedented price surges. Citing Bloomberg, one of China’s leading memory players, ChangXin Memory Technologies (CXMT), recorded a 130% annual revenue surge to over 55 billion yuan, equivalent to US$8 billion (Rp136 trillion). High-bandwidth memory (HBM) needed for AI is still dominated by Samsung, SK Hynix, and Micron, but export restrictions on HBM to China provide opportunities for CXMT. Phelix Lee, senior equity analyst at Morningstar, stated that after HBM was restricted from entering China, CXMT emerged as the sole domestic alternative. According to him, although technologically still lagging, products like HBM2 or HBM2e are still welcomed with high enthusiasm in the domestic market. ‘After HBM was restricted to China, CXMT emerged as the only domestic alternative, so even lower-tech HBM2 or HBM2e are welcomed enthusiastically,’ Lee said. Triolo added that expertise gained from memory chip manufacturing could lead to advances in other types of chips, such as GPUs. He sees China’s memory fabs now serving as incubators for advanced process technology in ways unimaginable before the US export controls in October 2022. ‘All memory fabs in China are now incubators for advanced process technology in ways unimaginable before the US export controls in October 2022,’ Triolo said. Despite setting records, China still faces major challenges because SMIC and Hua Hong cannot yet mass-produce the world’s most advanced chips like TSMC in Taiwan. This is because they cannot access the most advanced equipment produced by Dutch firm ASML due to export restrictions. Triolo emphasised that China is unique in essentially trying to recreate much of the entire semiconductor supply chain, which is undoubtedly a very heavy task and will take more time. ‘China is unique because it is essentially trying to recreate’