Hygon Posts 38% Surge in Q3 Profit on Domestic Chip Demand

Hygon Information Technology, a leading Chinese developer of high-end processors and artificial intelligence (AI) computing chips, reported that third-quarter profit rose 38 percent from a year earlier to 1.05 billion yuan (US$157 million) on a 45 percent surge in revenue to 5.9 billion yuan.

The Beijing-headquartered company attributed the growth to surging demand for domestic high-end chips, driven by rapid AI development. Research and development spending jumped 49 percent to 1.8 billion yuan, accounting for nearly one third of revenue.

Operating cash flow swung to a negative 2.4 billion yuan in the first nine months of the year from a positive 2.25 billion yuan a year earlier, as Hygon increased inventory purchases to secure supply and meet anticipated demand. Inventories reached 8.9 billion yuan at the end of September, up 39 percent from December.