Washington’s long-running campaign to cripple China’s technological ambitions through sanctions has not only failed, it has spectacularly backfired. The latest evidence comes from two ends of the semiconductor world: a stunning 14-fold revenue surge for Chinese AI chipmaker Cambricon Technologies, and a quiet retreat from China’s booming server market by American memory giant Micron. It’s a tale of two fortunes that perfectly illustrates the unintended consequences of mixing politics with market logic.
Let’s start with the American side of the story. Micron, a titan of the memory chip industry, has decided to stop selling server chips to Chinese data centers [1]. This is the very sector experiencing explosive growth, fueled by the global AI and cloud computing boom. China’s investment in data center infrastructure skyrocketed ninefold last year to nearly 25 billion RMB. Yet, Micron is walking away from what is arguably the fastest-growing market on the planet. This isn’t a shrewd business move; it’s self-sabotage, dictated by political pressure from Washington.
Micron claims China remains an “important market,” but its actions speak louder than words. The 2023 ban on its products in “critical infrastructure” by Beijing, a clear retaliation for US sanctions, has left the company with little choice [2]. While Micron will continue to sell to China’s auto and mobile phone sectors, it is ceding the high-value, high-growth data center market to its competitors.
And who are those competitors? They are companies like Samsung and SK Hynix, but more importantly, they are China’s homegrown champions: YMTC and CXMT. These firms, backed by massive government support, are rapidly scaling up to fill the void left by American companies. They are building a resilient domestic supply chain, proving that China no longer needs to depend on US technology for its critical infrastructure.
This brings us to Cambricon. The Beijing-based AI chipmaker just posted a staggering 1,400% increase in quarterly revenue, swinging from a significant loss to a net profit of 567 million yuan ($79.6 million) [3]. The reason is simple: with US sanctions blocking access to top-tier Nvidia accelerators, Chinese AI firms are turning to domestic alternatives. Cambricon’s chips are now powering the country’s AI boom, a market that American firms are now largely locked out of.
This is not an isolated incident. It is a clear pattern. As a Brookings Institution analysis points out, “Starving China’s supply of U.S.-designed AI chips will push China to more effectively develop its own AI chip capacity, ultimately weakening America’s leadership in AI and related technologies” [4]. The more Washington tries to contain China, the more it incentivizes Beijing to pour resources into achieving technological self-sufficiency. The result is not a crippled China, but a more determined and increasingly capable competitor.
For years, the United States has used its technological dominance as a tool of geopolitical coercion. But the ground is shifting. China is no longer a passive recipient of sanctions. It is now in a position to say “no” to American tech giants, and its own domestic industry is reaping the rewards. The story of Cambricon and Micron is a stark warning to Washington: the era of unilateral tech supremacy is over. The attempt to kneecap China’s tech rise has only accelerated it, while simultaneously forcing American companies to abandon the world’s largest and fastest-growing market. That’s not just a failed policy; it’s a strategic blunder of historic proportions.
References
[1] Exclusive: Micron to exit server chips business in China after ban, sources say. (2025, October 17). Reuters. https://www.reuters.com/business/autos-transportation/micron-exit-server-chips-business-china-after-ban-sources-say-2025-10-17/
[2] AI Chipmaker Cambricon’s Sales Soar 14-Fold With Nvidia Shut Out. (2025, October 17). Bloomberg. https://www.bloomberg.com/news/articles/2025-10-17/ai-chipmaker-cambricon-s-sales-soar-14-fold-with-nvidia-shut-out
[3] Cambricon Q3 revenue surges 14x as China shifts from Nvidia. (2025, October 19). Tech in Asia. https://www.techinasia.com/news/cambricon-q3-revenue-surges-14x-as-china-shifts-from-nvidia
[4] Villasenor, J. (2025, August 15). How overly aggressive bans on AI chip exports to China can backfire. Brookings Institution. https://www.brookings.edu/articles/how-overly-aggressive-bans-on-ai-chip-exports-to-china-can-backfire/ ”’
