Moore Threads’ 425% first-day pop tells one story. The company’s own warning of “over-exuberance”—followed by a 19% drop—tells another. The gap between those two narratives is where China’s semiconductor reality lives.
The numbers are intoxicating. A $54 billion valuation. An 870x price-to-revenue ratio. Beijing’s $70 billion support package. For context, Nvidia trades at 30x revenue. The market is pricing Moore Threads at nearly 29 times Nvidia’s multiple for a company that cannot access the equipment needed to compete with Nvidia.
The chokepoints tell the real story. Cambricon operates at 20% yields—four of every five chips discarded. SMIC remains locked out of EUV lithography. High-bandwidth memory comes from “smuggled” SK Hynix and Samsung supply chains, not domestic production. TSMC’s advanced nodes remain blocked by export controls.
This isn’t a technological gap. It’s a manufacturing physics problem that money alone cannot solve.
The scale gap quantifies the challenge. Through 2026, Nvidia will ship an estimated 1 million H20 chips to China (the export-compliant version). Huawei’s Ascend 910C targets 600,000 units. Cambricon projects 500,000. Combined domestic production barely matches what a single American company can ship under restricted conditions.
The Morningstar analyst’s assessment is blunt: replicating the chip-plus-software ecosystem requires more than a decade, given user inertia, fabrication gaps, and equipment restrictions.
What the euphoria actually represents: not confidence in technological parity, but a bet that Beijing’s strategic priority will sustain valuations regardless of competitive reality. The $70 billion support package isn’t investment—it’s a signal that these companies won’t be allowed to fail.
National champions can survive on policy. They cannot compute on it.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
