In the first quarter of 2026, China’s leading chipmakers reported allocating nearly half of their revenue toward R&D, significantly outpacing US counterparts as Beijing accelerates efforts to boost self-reliance in semiconductor technology amid rising AI demand.
- Chinese chipmakers allocate 45-50% of revenue to R&D, more than US peers
- US companies maintain higher total R&D spend despite lower ratios
- Strong AI demand drives rapid revenue and profit growth in China
What happened
China’s top semiconductor companies, including Moore Threads and MetaX, invested between 45 and 50 percent of their revenue into research and development during the first quarter of 2026. These figures are notably higher than major US chip firms such as AMD and Intel, which typically allocate 20-30 percent of their revenue to R&D.
Despite these high ratios, the absolute R&D spending by Chinese firms remains far below US levels; for example, Nvidia spent $18.5 billion on R&D in 2025, while Moore Threads and MetaX spent approximately $146 million and $190 million, respectively. This trend highlights China’s strategic prioritization of R&D relative to revenue amidst growing AI industry demands.
Why it matters
China’s elevated R&D investment ratios reflect a national ambition to reduce technological dependence on foreign suppliers and compete more effectively with US semiconductor giants. The surge in AI chip demand is a significant driver, encouraging rapid innovation and development in domestic chip design and manufacturing capabilities.
This investment strategy, though currently smaller in dollar terms than US counterparts, has enabled rapid advances for domestic firms. Cambricon, a more established Chinese chip designer, showed strong revenue growth and profitability alongside a slightly reduced R&D ratio, signifying a maturing business benefiting from increased AI sector activity.
What to watch next
Analysts will be closely monitoring whether Chinese chipmakers can sustain their high R&D ratios while increasing absolute spending to close the capability gap with leading US firms. Continued growth in AI-related computing demand will be critical for supporting revenue expansion and R&D scale.
Key indicators will include future quarterly results from emerging market entrants like Moore Threads and MetaX, alongside established players like Cambricon. Their ability to convert R&D investments into market-leading products amid a complex geopolitical environment will shape the global semiconductor landscape.