Technicians develop and produce automotive pressure sensors at the sensor research and manufacturing workshop of Hefei Senmol Sensor Technology Co in Hefei, East China's Anhui Province, on April 1, 2026. Photo: VCG

Profits of China's major industrial firms grew 18.2 percent year-on-year in the first four months of 2026, driven by strong growth in high-tech and chip-related sectors, official data from the National Bureau of Statistics (NBS) showed on Wednesday. The growth rate was 2.7 percentage points higher than in the first quarter.

Yu Weining, an NBS statistician, attributed the improved profitability to effective macroeconomic policies, expanding industrial output and rebounding product prices. He noted that equipment and high-tech manufacturing have become major growth drivers, with profits of major high-tech manufacturers surging 44.8 percent and contributing 7.8 percentage points to the total growth of profits.

The booming semiconductor sector stands out as a key growth engine. In the January-April period, profits of electronic special materials manufacturing soared 601.7 percent, optical fiber manufacturing jumped 347.6 percent and optoelectronic device manufacturing rose 51 percent.

Ma Jihua, a veteran semiconductor industry expert, told the Global Times that the stellar performance was in line with the upward trend across the whole chip industrial chain.

"Two major factors are behind the upturn. First, the thriving AI industry has spurred strong demand for semiconductors, optoelectronic products and electronic materials. Second, domestic substitution is gathering pace, backed by a complete supply chain and large-scale manufacturing capacity," he said.

Global semiconductor revenue is projected to exceed $1.3 trillion in 2026, exhibiting the highest growth in the past two decades, according to Gartner, a business and technology insights company.

"Amid high demand for AI processing, data center networking and power, and memory price inflation, the semiconductor industry is projected to achieve a third consecutive year of double-digit growth in 2026 - a milestone that underscores the sector's pivotal role in the AI technology stack," said Rajeev Rajput, senior principal analyst at Gartner.

CITIC Securities pointed out that, driven by the explosive development of Agent multimodal and other AI applications, shipments of domestic computing chips are expected to at least double in 2026. This will deliver strong growth momentum for chip design firms, advanced manufacturing processes, advanced packaging, high-end storage and supporting industrial chains.

Driven by vibrant market demand, companies in China's integrated circuit sector have seen solid investment and export growth. NBS data showed investment in integrated circuit manufacturing rose 11.6 percent year-on-year in the first four months, while integrated circuit exports surged 78.3 percent.

Hu Qimu, a professor at the Maritime Silk Road Institute of Huaqiao University, told the Global Times that facing repeated US attempts to curb China's advanced chip development, domestic enterprises are increasingly adopting locally made chips to keep supply chains stable. This trend has translated into growing order books and improved profitability for domestic integrated circuit manufacturers.