Overview
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.
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. The question isn't whether China will try—it's whether throwing money at a technology gap measured in generations can actually close it.
Key Indicators
People Involved
Organizations Involved
One of China's "Four Little Dragons" of GPU makers racing to replace Nvidia in the domestic market.
The foundry that shocked Washington by manufacturing 7nm chips without access to ASML's most advanced machines.
The telecom giant that became ground zero for US-China tech decoupling, now China's chip ecosystem architect.
Beijing's $300 billion bet that unlimited capital can overcome a multi-generation technology gap.
The regulatory body attempting to enforce a technological blockade that may be backfiring.
Timeline
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Biren Technology Hong Kong IPO Launch
Public OfferingBiren 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.
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China Mandates 50% Domestic Equipment Rule
PolicyBeijing enforces undocumented rule requiring chipmakers to source at least 50% of new fab equipment from Chinese suppliers, squeezing out foreign vendors.
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Big Fund III Operations Begin
InvestmentChina's third semiconductor fund begins investing with 2024-2039 timeline, focusing on eliminating dependence on ASML, Applied Materials, Tokyo Electron.
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China Big Fund Phase III Announced
InvestmentBeijing launches third investment phase with $47.5 billion targeting semiconductor equipment and materials—the hardest self-sufficiency challenge.
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Biren Co-Founder Xu Lingjie Resigns
LeadershipPresident and CTO Lingjie Xu departs Biren after Entity List sanctions, immediately launches new stealth AI chip startup.
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Biren Added to Entity List
SanctionsBIS designates Biren Technology and six subsidiaries to Entity List for "developing advanced computing integrated circuits," requiring licenses for any US technology.
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Huawei Mate 60 Pro 7nm Breakthrough
Technical BreakthroughHuawei 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.
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TSMC Halts Biren Production
Manufacturing DisruptionTSMC suspends manufacturing Biren's BR100 chips to ensure compliance with new US export controls, crippling Biren's production plans.
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Biden Administration Imposes Chip Controls
PolicySweeping export controls ban sales of advanced AI chips and manufacturing equipment to China, targeting 14nm and below production.
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Biren Unveils BR100 GPU
Product LaunchBiren reveals BR100 chip at Hot Chips conference: 77B transistors, 64GB memory, claiming performance near Nvidia H100. Baidu and China Mobile sign as customers.
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SMIC Achieves 7nm Technology
Technical BreakthroughSMIC successfully develops 7nm process node capability after two years of development—without ASML's EUV machines.
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SMIC Added to Entity List
SanctionsUS Commerce Department restricts SMIC's access to advanced chipmaking equipment, targeting China's manufacturing capabilities.
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SMIC Receives $2B State Investment
FundingBig Funds I and II inject $2 billion into SMIC, taking 34.6% ownership of China's foundry champion.
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China Big Fund Phase II Launches
InvestmentBeijing raises $29 billion for second phase of semiconductor investment fund, 75% earmarked for wafer fabrication.
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Biren Technology Founded
Company LaunchZhang Wen and Lingjie Xu establish Biren with backing from state-linked investors to build China's GPU alternative to Nvidia.
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Huawei Added to US Entity List
SanctionsTrump administration places Huawei on Entity List, cutting access to US technology and Android services. The opening salvo in the chip war.
Scenarios
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.
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.
Subsidy Trap: Zombie Chip Companies Burn State Capital
Discussed by: Skeptical economists citing Japan's semiconductor decline and China's previous industrial policy failures
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.
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.
Historical Context
Japan's Semiconductor Rise and Fall (1970s-1990s)
1976-2000What 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
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.
Soviet Semiconductor Autarky Failure (1960s-1980s)
1960-1991What Happened
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
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)
1987-2025What 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
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?