Profits in China's integrated circuit industry surged 18.5-fold year-on-year in the first seven months of 2026, as the accelerated expansion of the “AI+” initiative and sustained growth in computing-power demand boosted demand for related products, pushing up prices and driving rapid profit growth in electronics industries linked to AI production and applications. AI is moving beyond model development and becoming a source of demand for physical infrastructure and advanced manufacturing, with its impact increasingly visible in corporate earnings, Chinese experts said. The National Bureau of Statistics (NBS) announced that profits at major industrial enterprises totaled CNY4.58206 trillion in the first seven months, up 17.6% year-on-year. Operating revenue rose 6.5%, while profits increased 11.2% year-on-year in July alone. Industry observers said the more telling change lies in the composition of that growth. Electronics and high-tech manufacturing are emerging as major profit engines, as demand generated by AI spreads from chips and computing infrastructure into a much wider manufacturing ecosystem.
In the first seven months, the broader electronics sector as a whole saw profits more than double, rising 110% year-on-year and contributing 9.3 percentage points to total industrial profit growth. That made electronics the single largest driver of industrial profit growth, said Yu Weining, NBS Chief Statistician. The integrated circuit industry accounted for more than 80% of the increase in electronics-sector profits, with computing chips and memory chips among the main drivers. Elsewhere in the chain, profits in computer manufacturing, computer peripheral equipment and industrial control computers and systems rose 3.3 times, 2.5 times and 1.6 times, respectively.
Computing chips and high-bandwidth memory (HBM) are key hardware for AI computing, as both the training and inference of large models require substantial computing power and memory bandwidth, Ma Jihua, a veteran telecom industry observer, told the Global Times. “The rapid development of AI over the past two years has driven a sharp expansion in demand across both upstream and downstream industries,” Ma said. Upgrades in large models and robotics are pushing up investment in chips, data centers and memory, while stronger industrial output is translating into faster revenue and profit growth for related companies. The spillover is also visible in communications infrastructure. Profits in optical-fiber manufacturing jumped 468.4% in the first seven months, while optical-cable manufacturing and communications-system equipment manufacturing posted increases of 62.6% and 55%, respectively. High-tech manufacturing profits overall rose 50.1%, contributing 9.6 percentage points to total industrial profit growth, the Global Times reports.
