Analysis of China’s Semiconductor Industry Financial Reports for Q3 2025
Abstract
In the third quarter of 2025, China’s semiconductor industry delivered an impressive performance. Jiangbolong’s net profit increased nearly 20 times year-on-year, Changdian Technology’s revenue surpassed 10 billion yuan for the first time, and Allwinner Technology’s net profit grew by 267.36%. This recovery is not merely a cyclical rebound but a structurally driven growth propelled by technological innovation and domestic substitution.
Comprehensive Industry Recovery: Three Phenomena Reveal Structural Growth
For the entire year of 2025, the market size of China’s semiconductor industry is expected to reach 1.62 trillion yuan, a year-on-year increase of 13.3%. This indicates that the industry has completely emerged from the low period of 2023-2024 and is back on a growth track.
Specifically, in the third quarter, we observed three interesting phenomena:
Comprehensive Recovery of Profitability. The most obvious in the memory chip sector—Jiangbolong’s net profit increased nearly 20 times year-on-year, and Baiwei Storage’s net profit grew over 5 times. Lanke Technology benefited from the DDR5 generation iteration, with revenue increasing significantly by 57.22%.
Explosive Growth in Advanced Packaging. Changdian Technology’s revenue in the third quarter broke the 10 billion yuan mark for the first time, reaching 10.064 billion yuan, a historical high for the same period. Tongfu Microelectronics’ net profit increased by 55.74% year-on-year, and Huatian Technology’s net profit grew by 135.40% year-on-year.
Acceleration of Domestic Equipment Production. North Huachuang’s revenue in the first three quarters reached 27.301 billion yuan, a year-on-year increase of 33%; Zhongwei Company’s revenue in the first three quarters was 8.063 billion yuan, a year-on-year increase of 46.4%.
These data indicate that the industry recovery is comprehensive and of high quality.
Chip Design: Memory and AIoT Lead the Recovery
The chip design segment is the most resilient part of this recovery.
In the memory chip design field, GigaDevice is undoubtedly the leader. In the third quarter, revenue reached 2.681 billion yuan, a year-on-year increase of 31.4%; net profit was 508 million yuan, a year-on-year increase of 61.13%. It holds a leading position in the NOR Flash market while actively expanding into the DRAM and NAND Flash markets.
Memory module manufacturers Jiangbolong and Baiwei Storage also performed impressively. Jiangbolong’s revenue grew by 54.6% in the third quarter, while Baiwei Storage’s revenue increased by 68.06%. Their explosive performance is mainly attributed to the rebound in memory prices and the demand growth brought by the DDR5 memory iteration.
In the AIoT and smart terminal SoC field, Allwinner Technology’s performance is the most eye-catching. In the third quarter, revenue was 824 million yuan, a year-on-year increase of 32.28%; net profit achieved an astonishing growth of 267.36%. Its chips are widely used in smart vacuum robots, smart automotive electronics, and smart vision, coinciding with the explosion of AIoT devices.
Chip Manufacturing: Steady Expansion of Mature Processes
The chip manufacturing segment performed relatively steadily, but there is significant internal differentiation.
SMIC, as the largest wafer foundry in mainland China, focuses strategically on “sticking to 28nm” and other mature processes. In the third quarter of 2025, SMIC’s revenue reached 15.609 billion yuan, a year-on-year increase of 32.5%, with the proportion of domestic customers rising to 62%, particularly notable is the significant growth in AI mature process orders, which accounted for 25%.
Silicon Motion, as an IDM manufacturer, relies on its platform advantages, achieving revenue of 3.377 billion yuan in the third quarter, a year-on-year increase of 16.88%, setting a new quarterly revenue record. It has deep technical accumulation in power semiconductors, analog chips, especially in automotive electronics and industrial control.
It is noteworthy that domestic wafer foundries are rapidly improving their technical levels in mature processes. Although they are limited in advanced processes, domestic manufacturers’ technical capabilities in 28nm, 40nm, and 55nm mature processes can meet most application needs, with significant cost-performance advantages.
Packaging and Testing: Advanced Packaging Drives Performance
The packaging and testing segment is the fastest recovering and most resilient area in this semiconductor cycle. Among the top ten packaging and testing companies globally, four are from mainland China, demonstrating strong industrial competitiveness.
Changdian Technology, as the third largest globally and the largest in mainland China, performed the best. In the third quarter, its single-quarter revenue broke the 10 billion yuan mark for the first time, reaching 10.064 billion yuan, a historical high for the same period; net profit attributable to the parent company was 483 million yuan, with an improved gross margin year-on-year. The growth is mainly due to the rapid growth of high-value-added businesses such as computing electronics and automotive electronics, as well as the large-scale application of advanced packaging technologies such as Chiplet and SiP.
Tongfu Microelectronics saw a net profit increase of 55.74% in the first three quarters, rapidly developing its advanced packaging business driven by international clients like AMD. It has deep technical reserves in 2.5D/3D packaging and fan-out packaging, being one of the few domestic companies capable of providing high-end packaging services.
Advanced packaging is the core driving force behind the high growth of the packaging and testing industry. As AI and high-performance computing demand higher data transmission rates and lower power consumption, traditional packaging technologies can no longer meet these needs. Advanced technologies such as Chiplet and 2.5D/3D packaging have become necessary choices.
Equipment and Materials: Accelerated Domestic Production, Differentiated Progress
Equipment and materials are the foundation supporting the autonomy of the entire semiconductor industry and are areas where challenges and opportunities coexist in the domestic production process.
In the semiconductor equipment field, the domestic production process has significantly accelerated. North Huachuang, as a leading domestic equipment manufacturer, achieved revenue of 27.301 billion yuan in the first three quarters, a year-on-year increase of nearly 33%. It has achieved technological breakthroughs and market introduction in various key equipment fields such as etching machines, PVD, CVD, and vertical furnaces.
Zhongwei Company has international competitiveness in high-end etching equipment, with revenue of 3.102 billion yuan in the third quarter, making significant R&D investments and continuously iterating technology. Its etching equipment has entered leading wafer fabs such as TSMC and SMIC, and in certain niche areas, it can compete with international giants.
In the semiconductor materials field, performance has shown differentiation. Wafer manufacturers such as Shanghai Silicon Industry and Lian Micro faced certain price and inventory pressures in the third quarter, resulting in a phenomenon of “increased revenue without increased profit.” This indicates intensified competition in the wafer segment, with short-term profitability under pressure.
Overall, the equipment sector’s prosperity is higher than that of the materials sector. As domestic equipment gains more validation opportunities in 28nm and above production lines, market share is expected to continue to expand.
Downstream Applications: Three Engines Driving Demand Explosion
The strong recovery of China’s semiconductor industry in the third quarter of 2025 is inseparable from the robust demand in three core downstream application areas.
AI Servers and Data Centers continue to see explosive demand. Data shows that by 2024, China’s intelligent computing power will reach 725.3 EFLOPS, with a market size of 19 billion USD. Alibaba’s cloud business revenue grew by 13% year-on-year in the third quarter, with AI-related product revenue achieving triple-digit growth for six consecutive quarters.
Domestic AI chips have formed a full-stack layout of “cloud, edge, and terminal.” Huawei’s Ascend, Cambricon, and SiYuan series are making significant strides in cloud training and inference markets; Horizon Robotics and Black Sesame are occupying important positions in edge computing and smart automotive fields.
New Energy Vehicles are driven by both intelligence and electrification. It is expected that by 2025, the penetration rate of new energy vehicles in China will reach 40%, with the penetration rate of L2 and above intelligent driving exceeding 50%. By 2025, the market size of automotive chips in China is expected to grow from 120 billion yuan to 300 billion yuan, with a compound annual growth rate exceeding 25%.
Consumer Electronics are experiencing a market recovery alongside innovations in AI terminals. The return of Huawei’s Kirin chips and the launch of new smartphones have greatly boosted market sentiment and replacement demand. The emergence of AI PCs and AI smartphones has raised higher requirements for the computing power, energy efficiency, and heterogeneous computing capabilities of edge-side chips.
Technological Innovation and Domestic Substitution: Dual-Engine Acceleration
In the third quarter of 2025, the technological innovation and domestic substitution process of China’s semiconductor industry accelerated significantly.
Key Technological Breakthroughs: Advanced packaging and Chiplet technology, third-generation semiconductors (SiC), and innovations in AI chip architecture have become key paths for industry development.
Progress in Domestic Substitution: In processes such as de-gluing, cleaning, and thermal treatment, the domestic substitution rate has exceeded 30%. In the highly technical fields of etching and thin film deposition equipment, the domestic substitution rate has also reached about 20%. In automotive-grade chips, domestic MCUs, IGBTs, sensors, and power management chips have been scaled into body control, thermal management, some domain control, and electric drive systems.
Four Main Lines and Risk Alerts
Based on these financial report data, focus on the following four main lines:
AI Computing Power and Ecological Chain: This is the most certain growth engine in the current and coming years. Investment targets should cover the entire ecological chain of AI chips, high-bandwidth memory (HBM), advanced packaging, high-speed interconnect chips, and liquid cooling temperature control.
Advanced Packaging and Leading Testing Companies: In the post-Moore era, advanced packaging is key to enhancing chip performance and system integration. Focus on companies like Changdian Technology and Tongfu Microelectronics that have deep layouts in Chiplet, SiP, and Fan-out technology fields.
Domestic Substitution of Automotive Chips: The “new four modernizations” of automobiles have led to a simultaneous increase in both demand and price for automotive chips. Investment opportunities span power semiconductors, main control MCUs, smart cockpit SoCs, automotive sensors, and automotive storage.
Self-Control of Equipment and Materials: This is the cornerstone of the industrial chain and the most strategically valuable segment in the domestic production process. Focus on companies like North Huachuang and Zhongwei Company that have formed technological barriers in niche fields.
Risk Alerts: Be cautious of geopolitical and export control risks, risks of downstream demand falling short of expectations, and risks of cyclical fluctuations in the industry.
Conclusion
Overall, China’s semiconductor industry is in a phase of “cyclical recovery” and “structural growth” overlap. Investment opportunities are mainly concentrated in four main lines: AI chips and computing ecology, advanced packaging and interconnect technology, domestic substitution of automotive and industrial chips, and third-generation semiconductors and core equipment materials.
Looking ahead, AI will continue to deeply empower the entire industrial chain, and automotive electronics will become a “golden track”. The collaboration within the industrial chain will become closer. Although challenges and opportunities coexist, the vast domestic market, complete industrial system, relentless pursuit of innovation, and firm policy support are the greatest confidence for China’s semiconductor industry to navigate cycles and forge ahead.
Interaction
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