China’s chip dream: Loongson challenges Intel, fuelled by Beijing’s tech drive

Chinese chip designer Loongson Technology has shipped more than 1 million units of its flagship desktop processor, marking a milestone for China’s efforts to build a self-sufficient semiconductor industry and move domestic central processing units (CPUs) beyond basic usability towards broader commercial adoption. The 3A6000 processor, designed for desktop computers, was built on Loongson’s self-developed LoongArch instruction set architecture, proprietary IP cores, and domestic manufacturing supply chain. The company has said the chip’s performance is broadly comparable to Intel desktop processors released around 2020. Founded in 2001 as a research project under the Chinese Academy of Sciences before being spun off in 2010, Loongson became the first CPU-focused company listed on Shanghai’s Star market in 2022. It remains one of China’s most prominent efforts to build a domestic alternative to Intel and AMD. After years of being overshadowed by graphics processing units (GPUs) during the AI boom, CPUs are once again drawing attention as companies race to optimise AI infrastructure costs and reduce dependence on Nvidia. Loongson founder Hu Weiwu has described “Mao Zedong Thought” as the “soul” of the team, and is known for frequently wearing Mao suits and Mao badges, while displaying Mao quotations on office walls at the company. The development comes as Beijing continues to channel resources into reducing China’s dependence on foreign semiconductor technology, a campaign that has accelerated in response to sweeping US export controls restricting Chinese access to advanced chips, chip-design software, and leading-edge foundry services. China’s localisation drive extends beyond processors. A research team led by the Shanghai Artificial Intelligence Laboratory said on Monday it had used an “AI decision-making plus automated synthesis” system to achieve stable production of high-end KrF photoresist resin, a critical chipmaking material long dominated by a small group of overseas suppliers. The announcement highlights how China is attempting to close gaps across the semiconductor supply chain, from processors to upstream materials. The 3A6000 has emerged as one of the beneficiaries of China’s localisation drive. Since its launch in November 2023, the 3A6000 has been adopted in a Chinese government-backed IT replacement programme called “XinChuang”, including deployments in education, taxation and other public-sector systems. At the same time, Loongson is seeking to expand beyond policy-driven procurement and compete in the broader commercial market on price-performance. At an investor meeting in April, Hu said more Chinese customers were testing the company’s chips as foreign-brand alternatives became increasingly expensive. Hu also said the company had completed a strategic shift in manufacturing, moving to domestic production lines. He added that Loongson faced relatively limited cost pressure because its processor IP cores were developed in-house. Despite efforts to expand commercially, Loongson still sees China’s public-sector IT replacement cycle as a major near-term growth driver. Hu told investors that 2025 to 2027 would represent a concentrated procurement period for the government’s XinChuang projects, with 2026 likely to become a particularly strong year for orders. The company reported revenue of 635.3 million yuan (US$93.4 million) in 2025, up 26 per cent from a year earlier, while its net loss narrowed to 455.1 million yuan from 625.3 million yuan in 2024. Its gross margin rose to 47 per cent, reflecting stronger demand from XinChuang projects.