Chinese Chipmaker’s Shipments Surge 650% on Strong Domestic Demand

What’s new: Tianjin Phytium Information Technology Co. Ltd. reported a 650% surge in 2020 shipments of its home-grown computer processors, driven by rising domestic demand to replace imported chips.

Tianjin Phytium, the chipmaking unit of China’s state-owned technology conglomerate China Electronics Corp. (CEC), delivered 1.5 million of its Phytium CPUs this year, compared with last year’s 200,000 units, the company said Tuesday.

About 80% of Phytium’s CPU shipments were delivered to government clients as local authorities across China accelerated construction of internet technology systems for public services and urban management.

Why it matters: Phytium’s sales surge reflected China’s broader campaign to boost domestic chipmaking to reduce the country’s reliance on overseas technologies.

Beijing’s call to replace imported chips, operating systems and other IT gear with homemade substitutes is expected to create a market of more than 100 billion yuan ($15.4 billion) for domestic companies.

Analysts said Phytium’s sales also grew as it took market share from bigger rival Huawei Technologies Co., which is suffering supply cuts to key components under U.S. sanctions.

Phytium said the company has been expanding to meet rising domestic demand, increasing employment to 710 people this year from the previous 460. The company plans to invest 700 million yuan in 2021 in research and development, up from this year’s 400 million yuan.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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