Biren Technology's shares exploded 76% in their Hong Kong debut on January 2, 2026, raising $717 million—the first GPU chipmaker to list anywhere in the world this year. The company loses $1.6 billion annually and faces US export bans that forced its manufacturer to stop production. Investors piled in anyway, oversubscribing the retail offering 2,348 times. Within weeks, rival GPU makers Moore Threads and MetaX followed with Shanghai IPOs that surged 400% and 700% respectively, demonstrating that Chinese investors will fund chip independence regardless of profitability or US sanctions.
This is what US semiconductor sanctions have created: a Chinese chip industry powered by national survival instinct and unlimited state capital. Since 2019, Beijing has poured over $300 billion into building a domestic semiconductor supply chain that can survive without Western technology. By late January 2026, the results are undeniable: SMIC is mass-producing 5nm chips for Huawei's latest phones, Huawei's Ascend 950 AI accelerator features homegrown high-bandwidth memory, and Chinese memory maker CXMT targets HBM3 production by year-end. Meanwhile, the Trump administration's shift to case-by-case export approvals for advanced AI chips—while extracting 25% tariffs on China-bound sales—signals the US is recalibrating its approach. The question is no longer whether China will try to close the technology gap, but how quickly unlimited capital and forced self-reliance can overcome the structural advantages TSMC and Nvidia built over decades.
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People Involved
Zhang Wen
Founder and Chairman, Biren Technology (Chairman and CEO of publicly-listed Biren Technology following successful $717M Hong Kong IPO)
Lingjie Xu
Co-Founder and Former President, Biren Technology (Resigned January 2024, launched new AI chip stealth startup)
Gina Raimondo
US Secretary of Commerce (Architect of Biden administration's semiconductor export controls)
Donald Trump
President of the United States (2025-2029) (Architect of tariff-based semiconductor export policy targeting China)
Organizations Involved
BI
Biren Technology
Fabless Semiconductor Company
Status: Publicly listed on HKEX as of January 2, 2026, with shares trading at HK$34.46 (+76% from IPO price)
One of China's "Four Little Dragons" of GPU makers racing to replace Nvidia in the domestic market.
SE
Semiconductor Manufacturing International Corporation (SMIC)
Semiconductor Foundry
Status: China's largest chipmaker achieving 5nm mass production in January 2026, though yields remain 30-40% versus TSMC's 80%+
The foundry that shocked Washington by manufacturing 7nm chips without access to ASML's most advanced machines.
HU
Huawei
Technology Conglomerate
Status: Under comprehensive US sanctions but achieving technical breakthroughs with SMIC 5nm chips and self-developed HBM
The telecom giant that became ground zero for US-China tech decoupling, now China's chip ecosystem architect.
CH
China Integrated Circuit Industry Investment Fund
State Investment Vehicle
Status: Phase III launched December 2024 with focus on equipment and materials
Beijing's $300 billion bet that unlimited capital can overcome a multi-generation technology gap.
U.
U.S. Department of Commerce — Bureau of Industry and Security (BIS)
Federal Regulatory Agency
Status: Implementing Trump administration's tariff-based export policy with case-by-case licensing for advanced AI chips
The regulatory body attempting to enforce a technological blockade that may be backfiring.
CH
ChangXin Memory Technologies (CXMT)
Memory Semiconductor Manufacturer
Status: Pursuing $4.2B IPO to fund HBM3 mass production by end-2026
China's leading DRAM and high-bandwidth memory producer, racing to close the 3-4 year gap with Samsung, SK Hynix, and Micron.
MO
Moore Threads
Fabless GPU Company
Status: Listed on Shanghai STAR Market in January 2026 with 400%+ debut surge
One of China's 'Four Little Dragons' GPU makers, developing CUDA-alternative MUSA software ecosystem.
ME
MetaX Integrated
Fabless GPU Company
Status: Listed on Shanghai STAR Market in January 2026 with 700% debut surge
One of China's 'Four Little Dragons' GPU makers, targeting AI inference and edge computing markets.
IL
Iluvatar CoreX
Fabless GPU Company
Status: Completed Hong Kong IPO January 2026, announcing 2026-2028 roadmap targeting H200/B200 performance
One of China's 'Four Little Dragons' GPU makers, most aggressive in targeting Nvidia's high-end AI accelerator performance.
Timeline
SMIC Achieves 5nm Mass Production
Technical Breakthrough
SMIC's N+3 node enters high-volume production powering Huawei's Kirin 9030 chipset in flagship phones, achieving 5nm-class process without EUV lithography but with yields of only 30-40% versus TSMC's 80%+.
CXMT Announces HBM3 Production Target
Technical Development
China's ChangXin Memory Technologies targets mass production of HBM3 high-bandwidth memory by end-2026, pursuing $4.2B IPO to fund capacity expansion to 300,000 wafers/month. HBM remains critical bottleneck for Chinese AI chips.
Trump Imposes 25% Tariff on AI Chip Exports to China
Policy
President Trump implements 25% tariff on Nvidia H200 and AMD MI325X chips exported to China, effective immediately. Tariff exempts chips used domestically or for US manufacturing expansion but applies to China-bound sales as part of deal allowing conditional exports.
US Shifts H200 Export Policy to Case-by-Case Review
Policy
BIS changes export license review for Nvidia H200 and AMD MI325X chips from 'presumption of denial' to 'case-by-case basis,' requiring strict supply chain verification, security measures, and limiting China sales to 50% of US volumes.
China Pauses H200 Imports Despite US Approval
Market Response
Beijing instructs companies to pause Nvidia H200 purchases despite US export approval, with regulators evaluating import conditions. Nvidia CEO confirms no orders received from Chinese customers, highlighting China's push to avoid overreliance on US chips.
USTR Announces Semiconductor Tariffs on China
Policy
US Trade Representative issues affirmative determination in Section 301 investigation, announcing tariff action on semiconductor imports from China starting at 0%, increasing to undisclosed rate on June 23, 2027, citing China's 'non-market policies' in semiconductor sector.
Moore Threads and MetaX IPOs Surge 400-700%
Public Offering
China's 'Four Little Dragons' GPU makers continue IPO wave: Moore Threads shares surge over 400% in Shanghai STAR Market debut, MetaX soars 700%. Despite investor frenzy, companies hold less than 1% market share each in China's GPU market.
Iluvatar CoreX Announces 2026-2028 GPU Roadmap
Product Roadmap
Fourth 'Little Dragon' GPU maker Iluvatar CoreX reveals three-generation roadmap targeting Nvidia H200 and B200 performance levels, requiring 5-12x compute performance increases from current products. Announcement scheduled for January 26.
Biren Technology Hong Kong IPO Launch
Public Offering
Biren debuts on Hong Kong Stock Exchange as first 2026 IPO and first GPU stock listing. Shares surge 76% to HK$35.70, raising $717 million despite $1.6B annual losses. Retail oversubscribed 2,348 times.
Huawei Ascend 950 Series Launched with In-House HBM
Product Launch
Huawei releases Ascend 950PR AI accelerator in Q1 2026, first Chinese chip featuring self-developed high-bandwidth memory. 950PR targets inference/prefill workloads with 1 PFLOPS FP8 performance; 950DT variant for training follows Q4 2026 with 144GB HBM and 4TB/s bandwidth.
China Mandates 50% Domestic Equipment Rule
Policy
Beijing enforces undocumented rule requiring chipmakers to source at least 50% of new fab equipment from Chinese suppliers, squeezing out foreign vendors.
Big Fund III Operations Begin
Investment
China's third semiconductor fund begins investing with 2024-2039 timeline, focusing on eliminating dependence on ASML, Applied Materials, Tokyo Electron.
China Big Fund Phase III Announced
Investment
Beijing launches third investment phase with $47.5 billion targeting semiconductor equipment and materials—the hardest self-sufficiency challenge.
Biren Co-Founder Xu Lingjie Resigns
Leadership
President and CTO Lingjie Xu departs Biren after Entity List sanctions, immediately launches new stealth AI chip startup.
Biren Added to Entity List
Sanctions
BIS designates Biren Technology and six subsidiaries to Entity List for "developing advanced computing integrated circuits," requiring licenses for any US technology.
Huawei Mate 60 Pro 7nm Breakthrough
Technical Breakthrough
Huawei launches smartphone with SMIC-made 7nm chip during Commerce Secretary Raimondo's Beijing visit—proof China can advance despite controls. Analysts call it a "slap in the face" to US policy.
TSMC Halts Biren Production
Manufacturing Disruption
TSMC suspends manufacturing Biren's BR100 chips to ensure compliance with new US export controls, crippling Biren's production plans.
Biden Administration Imposes Chip Controls
Policy
Sweeping export controls ban sales of advanced AI chips and manufacturing equipment to China, targeting 14nm and below production.
Biren Unveils BR100 GPU
Product Launch
Biren reveals BR100 chip at Hot Chips conference: 77B transistors, 64GB memory, claiming performance near Nvidia H100. Baidu and China Mobile sign as customers.
SMIC Achieves 7nm Technology
Technical Breakthrough
SMIC successfully develops 7nm process node capability after two years of development—without ASML's EUV machines.
SMIC Added to Entity List
Sanctions
US Commerce Department restricts SMIC's access to advanced chipmaking equipment, targeting China's manufacturing capabilities.
SMIC Receives $2B State Investment
Funding
Big Funds I and II inject $2 billion into SMIC, taking 34.6% ownership of China's foundry champion.
China Big Fund Phase II Launches
Investment
Beijing raises $29 billion for second phase of semiconductor investment fund, 75% earmarked for wafer fabrication.
Biren Technology Founded
Company Launch
Zhang Wen and Lingjie Xu establish Biren with backing from state-linked investors to build China's GPU alternative to Nvidia.
Huawei Added to US Entity List
Sanctions
Trump administration places Huawei on Entity List, cutting access to US technology and Android services. The opening salvo in the chip war.
Scenarios
1
China Closes the Gap: Domestic Chips Reach Parity by 2030
Discussed by: Optimistic Chinese state media, domestic tech analysts, and investment banks promoting Chinese chip IPOs
Unlimited state capital, forced procurement mandates, and talent circulation from Western firms combine to close the technology gap within five years. SMIC achieves 5nm then 3nm through brute-force engineering. Equipment makers like Naura and SMEE develop viable alternatives to ASML and Applied Materials. The "Four Little Dragons" GPU companies capture 70%+ of China's domestic market from Nvidia. This scenario assumes China can overcome not just technical challenges but also the innovation gap—that massive R&D spending and iteration can substitute for the ecosystem advantages TSMC and Nvidia built over decades. Probability hinges on whether China's top-down industrial policy can generate bottom-up innovation.
2
Permanent Two-Generation Lag: China Builds Parallel Ecosystem
Discussed by: Western semiconductor analysts, CSIS researchers, and technology policy experts observing structural constraints
China achieves self-sufficiency but remains perpetually behind the cutting edge—manufacturing 7nm while TSMC produces 2nm, building adequate GPUs while Nvidia leaps ahead. This creates a bifurcated global chip market: Western companies dominate bleeding-edge AI and gaming, Chinese firms supply "good enough" chips for domestic needs and developing markets. Think of how Chinese EV batteries achieved dominance despite initially trailing Japanese technology. The gap narrows but never closes because innovation compounds faster at the frontier. China accepts this as the price of independence, focusing on volume and cost rather than absolute performance. Most likely scenario according to semiconductor industry veterans.
3
Subsidy Trap: Zombie Chip Companies Burn State Capital
The Big Funds create a dozen Biren-style companies—burning billions annually, inflating market caps through nationalist fervor, but never achieving sustainable profitability or true competitiveness. Equipment makers produce tools that work but with lower yields and higher costs than foreign alternatives. Local governments compete to fund overlapping projects. Corruption scandals emerge as in previous rounds. By 2030, China has spent $500 billion to achieve a fragmented, inefficient semiconductor ecosystem dependent on permanent subsidies and captive procurement. The 7nm achievement proves to be the high-water mark, with further progress stalling as the technical challenges multiply. Historical parallel: Japan's VLSI project achieved temporary competitiveness in the 1980s before structural factors led to long-term decline.
4
Negotiated Détente: US Eases Controls, China Slows Self-Sufficiency
Political calculus shifts as US semiconductor companies—Nvidia, Qualcomm, Applied Materials—hemorrhage revenue from lost China sales. The 2027 tariff announcement already delayed to avoid immediate escalation. A new administration or strategic reassessment leads to calibrated easing: China can buy previous-generation equipment and chips, the US maintains a lead of 1-2 nodes, and both sides step back from technological decoupling. China's self-sufficiency push loses urgency without existential threat, and state investment shifts to other strategic sectors. Companies like Biren survive in niches but can't compete with Nvidia when market access returns. Least likely scenario given current geopolitical trajectory, but would dramatically change the story arc.
Discussed by: Semiconductor manufacturing analysts at TrendForce, SemiAnalysis, and investment banks analyzing SMIC's economics
SMIC achieves 5nm and pushes toward 3nm using DUV multi-patterning, but yields remain stuck at 30-40% versus TSMC's 80%+, resulting in chips costing 50% more to produce. Chinese companies can manufacture advanced nodes but only through brute force and massive subsidies—each wafer requires 2-3x as many lithography passes, consuming more time and materials. State procurement mandates force adoption despite higher costs, creating a permanently subsidized ecosystem that functions domestically but cannot compete in export markets. China achieves technical self-sufficiency but not economic competitiveness, requiring perpetual state support similar to its high-speed rail network. By 2028, Chinese fabs produce millions of 5nm chips annually, but only because captive customers have no choice and state capital absorbs the cost differential.
Historical Context
Japan's Semiconductor Rise and Fall (1970s-1990s)
1976-2000
What Happened
MITI coordinated the VLSI Research Project (1976-1979) pooling resources from Fujitsu, Hitachi, Mitsubishi, NEC, and Toshiba to challenge American chip dominance. By 1988, Japan controlled 50% of global semiconductor sales. Then came strategic missteps: focusing on technological perfection over market needs, missing the PC revolution, and failing to adapt to rapid commoditization. By 2000, Japan had retreated to niche equipment and materials markets.
Outcome
Short Term
Spectacular success—Japan briefly led the world in DRAM production and manufacturing quality.
Long Term
Complete strategic failure as South Korea and Taiwan's more market-responsive models won, while Japan's consensus-driven approach couldn't match innovation speed.
Why It's Relevant Today
China's state-directed chip push mirrors Japan's coordinated industrial policy, raising questions about whether top-down planning can sustain competitiveness in fast-moving technology sectors. The 50% equipment rule and forced procurement echo MITI's strategies—which worked temporarily but failed long-term.
The USSR attempted complete semiconductor self-sufficiency during the Cold War, investing heavily in domestic chip production isolated from Western technology. Despite strong physics and materials science capabilities, Soviet chips lagged Western equivalents by a full generation. The closed ecosystem prevented learning from global innovation, while lack of market discipline meant inefficient designs persisted. Soviet computers in the 1980s used chip technology from the Western 1970s.
Outcome
Short Term
Functional but inferior chips adequate for military and industrial applications under autarky conditions.
Long Term
Complete technological obsolescence contributing to Soviet economic stagnation, proving isolation from global innovation ecosystems is fatal for semiconductor competitiveness.
Why It's Relevant Today
The cautionary tale for China's independence strategy—can a state-directed chip industry separated from cutting-edge Western technology and EDA tools keep pace with global innovation? China has vastly more capital and market access than the USSR, but faces similar risks of technological isolation.
Taiwan's TSMC Model: Private Innovation with State Support (1987-Present)
1987-2025
What Happened
Taiwan's government seeded TSMC in 1987 with $220 million but gave founder Morris Chang operational independence and market discipline. TSMC's pure-play foundry model—manufacturing for fabless designers without competing against them—created a trusted neutral platform. Relentless R&D investment (8-10% of revenue), partnerships with ASML and suppliers, and focus on customer needs drove TSMC to 60%+ market share in advanced logic chips. Now manufactures 90% of the world's most advanced chips.
Outcome
Short Term
Slow initial growth competing against established Intel and Japanese chipmakers took 15+ years.
Long Term
Became the world's indispensable semiconductor manufacturer, achieving technological leadership and enormous strategic leverage despite Taiwan's small size.
Why It's Relevant Today
The counterfactual to China's approach—market-driven innovation with state support beat pure state direction. TSMC succeeded because customers demanded excellence, forcing constant innovation. China's domestic chipmakers face captive markets and guaranteed procurement, weakening the competitive pressure that made TSMC great. Can subsidies substitute for market discipline?
