NVIDIA has set its sights on Xianyang, Shaanxi, and is buying up all the chips here.
In the summer of 2013, an engineer from a Japanese semiconductor material supplier flew to Xianyang Airport to inspect a Chinese enterprise. The car sent to pick him up was an old Alto.
The engineer stood at the entrance of the hall, looking at the car, hesitated for a few seconds and didn't dare to get in. He suspected that he had encountered a scammer.
That Alto belonged to a small company that had been established for only half a year and was registered in the Xixian New Area. The total number of employees in the company was less than 20, and the cash in the account was tight. They couldn't even afford a decent business car.
Thirteen years later, in the first quarter of 2026, the gross profit margin of this company reached as high as 77.81%, close to that of Moutai. The net profit in a single quarter increased by 12 times year-on-year. Its products are installed in NVIDIA's most expensive AI servers. At least one out of every three newly built data centers in the world is equipped with its products.
This story is about a doctor who was scammed out of seven million yuan by an acquaintance, an old industrial city where the housing price dropped from 9,000 yuan to 5,000 yuan, and a 13 - year journey where you ignored me at first, but later I became out of your reach.
A Tsinghua doctor was scammed out of money
The protagonist of the story is Lao Zhang, born in 1970. He graduated from Tsinghua University as an undergraduate and holds a doctorate in materials science from the University of Southern California. After graduation, he worked in the optical communication industry in the United States for nearly ten years and worked his way up to the R & D director. His resume is impeccable.
In 2010, the company he worked for was sold by its parent company. So, at the age of 40, Lao Zhang decided to return to China to start a business.
But the first pitfall he stepped into almost bankrupted him.
At that time, Lao Zhang was in the United States, but he established a chip company in Beijing. Out of trust, he found an acquaintance to be the general manager. As a result, this general manager secretly moved more than 7 million yuan of public funds from the company's account to pay off his own debts behind everyone's back.
By the time Lao Zhang found out, the money had been squandered. Two years of hard work and the principal were completely gone, and the first company went bankrupt.
This became the most expensive tuition fee Lao Zhang paid for his entrepreneurship: never hand over the lifeline to someone you can't fully control.
At the end of 2012, the unyielding Lao Zhang left Beijing with two partners and returned to Shaanxi. Hearing that there were policy supports in his hometown, Xianyang, the guys went there for a visit and decided to start over in Xianyang. In 2013, the new company was registered and established in Xianyang.
Choose the most difficult task
This time, Lao Zhang chose an unpopular track that was non - existent in China at that time: DFB laser chips.
In the data transmission in the Internet world, light is used to transmit data in optical fibers. The DFB chip is like a super flash, which converts the electrical signals of the computer into optical signals and can switch on and off billions of times per second. Without it, the optical fiber network would be a bunch of dead lines.
In 2013, this kind of high - end chip was 100% dependent on imports from the United States and Japan. No one in China could produce it at all.
Lao Zhang made an extremely bold decision: instead of doing light - asset OEM, he chose the heaviest and most money - consuming model. He built his own production lines for the entire chain, from chip design, wafer growth, to manufacturing and packaging.
Because of lack of money, they lived a life of scavenging: they couldn't afford new equipment, so they searched all over the world for second - hand equipment from overseas bankrupt factories. When the parameters of the second - hand machines they bought were incorrect, Lao Zhang took the lead in modifying them himself.
That shabby Alto that went to the airport to pick up the Japanese expert was a true reflection of that time. It wasn't until a Zhongguancun fund in Beijing took a fancy to Lao Zhang's technical resume and invested a life - saving sum of money that the company barely survived the most difficult equipment debugging period.
At the beginning of 2014, Lao Zhang completely resigned from his position as an executive in a foreign company and fully devoted himself to the factory in Xianyang.
Rise in the price war
Before 2018, in the domestic market of medium - and low - speed optical chips (2.5G and 10G), it was almost the world of Japanese companies such as Sumitomo and Mitsubishi, as well as the American company Lumentum. These overseas giants were lying in the high profits brought by monopoly.
When Lao Zhang's team caught up with the technological gap and the production line began large - scale mass production, the American and Japanese giants, who were used to high barriers, felt threatened and immediately launched a price war.
In just one or two years, taking advantage of their long - term capital advantages, the overseas giants actively cut the prices of similar products in half, and even approached the cost line at one point, intending to strangle Lao Zhang's company before it could grow strong.
At that time, the factory in Xianyang was under huge financial pressure, but the self - developed model of the entire industrial chain that Lao Zhang adopted began to show its power. Since they had control over design, process, and packaging, Lao Zhang took the lead in optimizing the wafer structure and managed to raise the yield rate to the highest level in the industry, thus controlling the cost per chip to be lower than that of the overseas giants.
By 2021, the situation of the price war was completely reversed. The American and Japanese giants found that not only did they fail to drag down this company in Xianyang, but also their medium - and low - speed optical chip business fell into losses due to their high labor and operating costs.
Finally, the Japanese and American giants had to shrink their production lines and gradually withdraw from the domestic medium - and low - speed optical chip market in China, ceding more than half of the market share to this Chinese enterprise.
Listed but in losses from 2022 to 2024
In December 2022, the company was successfully listed.
However, from 2023 to 2024, the communication industry entered a cold winter, and major customers reduced their spending one after another. In 2024, although the company's revenue increased, the net profit suffered a loss of 6.13 million yuan.
Many people in the market began to question: Is this another pseudo - high - tech company that went public based on concepts?
But these Tsinghua science and engineering men, at the time when the financial statements looked the worst, were holding two ultimate weapons: 70mW and 100mW high - power CW laser chips.
These two ordinary - looking technical parameters soon became the admission ticket to NVIDIA's industrial chain in the era of the great AI explosion.
The intersection of fates
When it comes to this, we have to mention another optical chip giant, which is located in Hebi, Henan. I wrote about it in my previous article.
These two companies are like two outstanding stars in China's hard - tech landscape. Their founders have very different backgrounds, but they meet at the same finish line.
In NVIDIA's latest GB200 super - computing cabinet, these two kinds of chips are indispensable:
The AWG chips from Hebi, Henan are responsible for planning the traffic network for the huge data flow.
The high - power CW laser chips from Xianyang, Shaanxi, as high - difficulty light sources, continuously provide the power for data transmission.
They are not competitors; they are close friends lying in NVIDIA's servers.
The wind of AI blows into the Xianyang Industrial Park
In 2025, AI large models went completely crazy globally, and the requirements for data transmission speed showed a geometric explosion. Lao Zhang, who originally relied on telecom operators for business, suddenly found that his high - power chips had become a global hard currency.
In the first quarter of 2026, the company's financial data was extremely impressive:
- Single - quarter revenue: 355 million yuan, a three - fold increase year - on - year;
- Single - quarter net profit: 179 million yuan, an almost 12 - fold increase year - on - year;
- The gross profit margin was as high as 77.8%. This figure means that there are only a few enterprises in the world that can produce this kind of light - source chips. Lao Zhang has absolute say and can compete with the United States and Japan.
When the company was just listed, the market only gave it a market value of 7 billion yuan. Now, it has become a chip behemoth with a market value of 220 billion yuan, a 30 - fold increase in 5 years.
A bold bet of 1.251 billion yuan
In March 2026, after making money, Lao Zhang issued a shocking announcement: He plans to invest 1.251 billion yuan to expand a new production base in the Xixian New Area, fully targeting the next - generation 1.6T ultra - high - speed optical chips.
This amount of money is equivalent to twice the annual revenue in 2025. This is an ultimate bold bet on the future.
Almost at the same time, the company in Hebi, Henan also announced an expansion plan of 1.265 billion yuan. These two enterprises that emerged from third - and fourth - tier cities in China each bet more than 1.2 billion yuan to fill the production capacity gap in the global AI computing power competition.
Why Xianyang and Hebi?
These two cities have highly similar fates: they are both traditional old industrial or resource - based cities that have experienced population outflow. Data in May 2026 showed that the average price of second - hand houses in Qindu District, Xianyang had dropped to 5,847 yuan per square meter, nearly 40% lower than the peak in previous years.
Those young engineers and technical workers who couldn't afford to buy a house or a foothold in big cities found a place to settle down in Xianyang and Hebi. The extremely low cost of living has helped these hard - tech enterprises that need to spend years honing their skills to build an extremely stable technical rear - area with a very low turnover rate.
Thirteen years ago, that Japanese engineer sat in the shabby Alto, full of distrust of Made in China.
Thirteen years later, the chips produced day and night in the dust - free rooms underground in Xianyang are installed in NVIDIA servers that represent the peak of human computing power and sent to the world.
The rise of China's hard - tech doesn't have many high - end office building myths. Its background is often a group of science and engineering men in anti - static suits, gnashing their teeth and struggling with a bunch of second - hand machines in third - and fourth - tier cities with a housing price of 5,000 yuan.
This article is from the WeChat official account “Washu” (ID: washu66), written by Washu, and published by 36Kr with authorization.