China’s AI-Chip Boom Has Reached the Earnings Test

Key points

• MetaX reported first-half revenue of about RMB1.32 billion and net profit of about RMB612 million, but it still recorded a roughly RMB49 million loss after non-recurring items and about RMB1.30 billion of negative operating cash flow. Sources: S1
• Iluvatar CoreX reported revenue of about RMB946 million and net profit of about RMB106 million. The company said its turn to profit was mainly caused by an unrealized gain on shares it held, while its total gross margin fell to 17.2%. Sources: S2
• Biren reported revenue of about RMB1.24 billion, up from a small base, but it remained loss-making with a first-half loss of about RMB377 million and research spending of about RMB804 million. Sources: S3
• China’s government wants a secure and reliable supply of core AI technologies by 2027. These company-reported interim results show progress in domestic shipments, but they do not prove global market share, NVIDIA-level performance, or freedom from export controls. Sources: S1, S2, S3, S4

The same boom produced three different earnings stories

MetaX, Iluvatar CoreX, and Biren each reported rapid first-half growth as Chinese customers bought more domestic AI accelerators and related systems. The numbers show that a real commercial market is forming. They do not show that every supplier has reached the same level of demand, margins, cash generation, or technical maturity.

These are company-reported interim figures. Percentage growth can also look dramatic when it starts from a small base. A useful comparison must separate product revenue from investment gains, reported profit from profit after non-recurring items, and shipments from the cash required to make and deliver them.

Sources: S1, S2, S3

MetaX made a profit, but operations tell a harder story

MetaX reported first-half revenue of about RMB1.32 billion, up 44.7%, and net profit of about RMB612 million. Yet profit excluding non-recurring items was a loss of about RMB49 million. That gap means the headline profit should not be treated as proof that the core business was profitable on its own.

Operating cash flow was negative by about RMB1.30 billion. Fast growth can consume cash as a chip company builds inventory, pays suppliers, and waits for customers to pay. The filing supports a story of rising sales and improving scale. It does not yet support a claim of steady, cash-generating profitability.

Sources: S1

Iluvatar and Biren show two other paths through the market

Iluvatar reported about RMB946 million in revenue, up 191.6%, and about RMB106 million in net profit. The company said the profit turn was mainly due to an unrealized gain on listed shares it held. Its total gross margin fell from 50.1% to 17.2%, partly because low-margin component sales and impairment charges weighed on the result.

Biren’s revenue rose to about RMB1.24 billion from a much smaller base, while its loss narrowed to about RMB377 million. It also spent about RMB804 million on research and development. Those figures show strong investment and a much larger business, but Biren remained loss-making during the period.

Sources: S2, S3

Self-reliance needs operating proof

China’s policy goal is to build a secure and reliable supply of core AI technology by 2027. Domestic accelerator sales can reduce dependence on foreign chips in some workloads. Financial growth alone cannot show whether the chips match leading systems in training speed, inference cost, software support, reliability, or access to advanced manufacturing.

The next scorecard should track revenue mix, gross margin, operating cash flow, repeat customers, product benchmarks, software adoption, and the cost of continued research. The first-half filings mark a real step from prototypes toward business scale. They do not settle which companies can turn that scale into a durable chip platform.

Sources: S1, S2, S3, S4

Why it matters

China’s domestic accelerator market affects cloud capacity, model costs, supply-chain resilience, and the reach of export controls. Revenue growth shows that customers are buying. The quality of earnings shows whether that demand can support the long research cycles, manufacturing risks, and software investment needed to compete over time.

Sources: S1, S2, S3, S4

Sources

1. MetaX Integrated Circuits 2026 Half-Year Report — Shanghai Stock Exchange · 2026-08-31
2. Iluvatar CoreX Interim Results for the Six Months Ended June 30, 2026 — Hong Kong Exchanges and Clearing · 2026-08-28
3. Biren Technology Interim Results for the Six Months Ended June 30, 2026 — Hong Kong Exchanges and Clearing · 2026-08-28
4. China unveils action plan to drive high-quality AI development — State Council of the People’s Republic of China · 2026-01-08