Eliza Wong
AI Chip Maker’s Evasive Earnings Conference Raises Concerns
The recent Cambricon (688256.SH) earnings conference has left institutional investors with more questions than answers about China’s leading AI chip company. During the September 18th performance briefing, management carefully avoided addressing critical concerns about client concentration, business sustainability, and competitive positioning while enthusiastically promoting their future technology roadmap. This Cambricon earnings conference highlighted the growing disconnect between the company’s ambitious AI vision and its reluctance to provide transparency about current operations.
Investors submitted dozens of questions during the Cambricon earnings conference, but management selectively addressed only a limited number, focusing primarily on forward-looking technology developments rather than current business fundamentals. The company’s leadership consistently redirected discussion toward their big model strategy while providing vague responses to questions about their mysterious major client and competitive advantages against industry giants like NVIDIA and Huawei.
Key Conference Takeaways
– Management extensively discussed next-generation AI chip development but avoided specific client identification
– Company reported impressive 4,347.82% revenue growth but provided no clear sustainability roadmap
– Inventory buildup was explained as strategic preparation for AI compute demand rather than addressing potential overstock concerns
– Competitive positioning questions received generalized responses without specific product comparisons
Technology Vision Versus Business Reality
Throughout the Cambricon earnings conference, Chairman Chen Tianshu (陈天石) emphasized the company’s commitment to next-generation processor architecture and instruction set optimization. He detailed focus areas including natural language processing, video image generation, and vertical large model training inference scenarios. The technological vision presented was comprehensive, but it lacked specific timelines and measurable milestones that would enable investors to properly evaluate execution capability.
The software ecosystem received significant attention during the Cambricon earnings conference discussion. Chen highlighted the company’s developer community, complete online courses, development documentation, and programming examples designed to attract and onboard developers efficiently. The stated goal is creating full-process open service capabilities covering large model technology development to application deployment, but concrete adoption metrics were notably absent from the presentation.
Inventory Concerns Addressed Incompletely
Company Secretary Ye Haoyin (叶淏尹) addressed the significant inventory growth reported in H1 2025, attributing it to proactive stocking for cloud product lines in anticipation of sustained AI computing demand. While this explanation aligns with broader market trends, it failed to convince analysts concerned about potential inventory write-downs if demand projections don’t materialize. The inventory discussion during the Cambricon earnings conference lacked detailed data on inventory turnover rates or aging analysis that would provide comfort about inventory quality.
The Mystery Major Client Question
Investors repeatedly pressed management during the Cambricon earnings conference to identify the company’s major clients, particularly given the concentration risk inherent in their dramatic revenue growth. The question ‘Who are Cambricon’s customers? Is the company’s product supply unable to meet demand?’ received only a generic response referencing deployment across operators, financial institutions, and internet companies without specific names or contract details.
Notably, when directly asked whether ByteDance was the rumored major client, management declined to respond entirely. This pattern of client secrecy isn’t new for Cambricon – the company only disclosed its largest clients in 2021 and 2022 annual reports, revealing state-backed intelligent computing center projects in Jiangsu Kunshan and Nanjing. The current lack of transparency continues to concern investors who need to assess customer concentration risks and business sustainability.
Historical Client Disclosure Patterns
– 2021 Annual Report: Disclosed first major client as Jiangsu Kunshan state-backed smart computing center project company
– 2022 Annual Report: Disclosed Nanjing state-backed intelligent computing center as major client
– 2023-Present: No specific client disclosures in financial reports or regulatory filings
– Current Major Client: Management continues to withhold identity despite direct investor questioning
Business Sustainability Concerns
The astronomical growth figures – 28.81 billion yuan revenue representing 4,347.82% year-over-year growth and 10.38 billion yuan net profit marking the first half-year profitability – naturally raised questions about sustainability during the Cambricon earnings conference. When investors asked about maintaining current profit levels, Chairman Chen provided no specific financial projections, instead reiterating the company’s focus on technological innovation and market expansion.
This avoidance of forward-looking financial guidance is particularly concerning given the capital-intensive nature of AI chip development and the increasing competition in the sector. Without clear visibility into revenue sustainability, investors cannot properly model future cash flows or determine appropriate valuation multiples for the company. The Cambricon earnings conference missed a critical opportunity to provide transparency around customer contracts, backlog visibility, and pricing stability that would support the sustainability narrative.
Competitive Positioning Questions Unanswered
The competitive landscape discussion during the Cambricon earnings conference proved equally unsatisfying for analysts seeking concrete comparative data. When asked about competing against NVIDIA and Huawei, management provided generalized statements about independent research and development and technological foresight without specific product comparisons or performance metrics.
Industry data from IDC reveals Cambricon’s challenging competitive position: 2024 AI chip shipments of 26,000 units representing just 4% of the domestic AI chip market, significantly trailing Huawei’s Ascend (640,000 units) and Baidu’s Kunlun Core (69,000 units). This marketshare data, absent from the Cambricon earnings conference discussion, highlights the company’s minority position in a market dominated by better-resourced competitors with more established ecosystems.
Market Position Reality Check
– Huawei Ascend: 640,000 units shipped in 2024 (Market leader)
– Baidu Kunlun Core: 69,000 units shipped in 2024 (Second position)
– Cambricon: 26,000 units shipped in 2024 (Distant third)
– Market Share: 4% of domestic AI chip market despite being A-share market cap leader
Financing Activities and Market Performance
Amid these unanswered questions, Cambricon is progressing with significant fundraising activities. The company has received China Securities Regulatory Commission (中国证券监督管理委员会) approval for a targeted stock issuance aiming to raise up to 3.985 billion yuan primarily for large model-oriented chip and software platform projects. This capital raise, while supporting growth ambitions, also dilutes existing shareholders and increases financial leverage without clear visibility on return prospects.
The secondary market reaction tells a different story from the analytical concerns raised during the Cambricon earnings conference. The stock closed at 1,420.99 yuan per share on September 18th, representing an astonishing 952.9% increase from the 134.96 yuan closing price at the end of 2023. This dramatic appreciation appears disconnected from the fundamental concerns about client concentration, competitive positioning, and business sustainability that dominated investor questions during the Cambricon earnings conference.
Investment Implications and Forward Outlook
The Cambricon earnings conference ultimately revealed more about management’s communication strategy than about the company’s business fundamentals. The selective answering of investor questions, avoidance of specific client identification, and generalized competitive discussions suggest either significant business vulnerabilities or poor investor relations practices – neither scenario inspires confidence for institutional investors requiring transparency for portfolio decisions.
For sophisticated market participants, the Cambricon earnings conference underscores the importance of critical due diligence beyond official presentations. Investors should closely monitor upcoming financial disclosures, regulatory filings, and industry channel checks to independently verify the company’s market position and customer relationships. The disconnect between the stock’s spectacular performance and the fundamental concerns raised during the Cambricon earnings conference suggests either market inefficiency or information asymmetry that warrants cautious positioning.
As China’s AI chip competition intensifies, Cambricon must address these transparency issues to maintain investor confidence and secure its position in an increasingly crowded market. The next earnings conference will be critical for rebuilding trust – management must prepared to address the unanswered questions from this Cambricon earnings conference with concrete data and specific commitments rather than generalized technology visions.
