AI boom, profit surge fuel China’s ambitious chip assembly buildout

Chinese chip packaging firms launch multibillion-dollar expansion drive after logging triple-figure profit growth on surging AI demand

China’s leading semiconductor packaging and testing companies have launched a multibillion-dollar capacity expansion drive, as they ride a surge in artificial intelligence demand, stellar first-half profit growth, and Beijing’s urgent push for tech self-sufficiency.

In the first half of the year, China’s three leading outsourced chip packaging companies – Jiangsu Changjiang Electronics Technology (JCET), Tongfu Microelectronics and Huatian Technology – announced capacity expansion investments exceeding a combined 15 billion yuan (US$2.2 billion).

Packaging and testing are the final steps in chip manufacturing. The fresh capital is aimed at scaling the firms’ high-end advanced packaging for AI accelerators, after the companies reported robust earnings growth in the first six months of 2026.

JCET, China’s largest packaging and testing firm, saw its net profit surge 79.4 per cent year on year to 845 million yuan, while revenue hit a record 19.5 billion yuan on strong computing electronics sales, according to its earnings report last week.

In June, the firm unveiled a 7.8 billion yuan plan for a sprawling new advanced packaging and testing facility for high-end AI chips in Shanghai’s Lingang area, with phase one scheduled for completion in the second half of 2028.

Meanwhile, Tongfu Microelectronics – slated to release its latest earnings results on Friday – has forecast a first-half profit surge of up to 337 per cent year on year, driven partly by its strategic partnership with US semiconductor firm Advanced Micro Devices’ next-generation processors.

The Chinese company recently received regulatory approval for a 4.2 billion yuan private share placement, and plans to allocate 888 million yuan to add 849,600 wafers of annual memory chip capacity.