MIIT: China's Digital Industry Revenue Reaches 20.71 Trillion Yuan in H1, Profits Up 19.3% YoY
nashnova research
China's digital industries earned ¥20.71 trillion in revenue and ¥1.79 trillion in profit in H1 2026, with profit growth at 19.3% far outpacing revenue growth — AI demand and strong exports are shifting the sector from scaling up to actually making money.
Profit growing nearly 6 points faster than revenue — what does that tell us?
H1 digital-industry revenue rose 13.6% year-on-year; profit rose 19.3% — profit is outrunning the top line.
This means → the sector is not just selling more — profit per yuan of revenue is getting thicker, with the margin reaching 8.6%.
MIIT attributes the profit surge to two forces: surging AI demand + strong exports — domestic pull and foreign pull firing at the same time.
Where is the money concentrated?
The top 10 provinces and cities — Guangdong, Jiangsu, Beijing, Shanghai, Zhejiang and others — accounted for ¥17.21 trillion, or 83.1% of the national total.
In plain terms = more than four-fifths of China's digital-industry revenue comes from just 10 regions.
But central China is growing faster: ¥2.86 trillion in revenue, up 28.3% — nearly 15 points above the national average, led by Anhui and Hubei.
This reflects a geographic spread: digital industry is no longer a coastal-only story.
AI computing power up 177% — how extreme is that number?
China's intelligent computing capacity — the processing power dedicated to AI training and inference — reached 2,185 EFLOPS, up 177% year-on-year.
This means → in a single year, AI-specific computing nearly tripled, reflecting a construction boom in GPU clusters and smart-computing centres.
The country now has 52 facilities with over 10,000 cards each; overall rack utilisation stands at 71.4%.
In plain terms = a lot of machines have been bought and 70% are powered on and running — but nearly 30% sit idle. Whether that gap closes in H2, generating real commercial returns, is the key test.
Electronics manufacturing profits surged 66% — who is making the money?
Large-scale electronic-information manufacturers posted ¥12.15 trillion in revenue, up 17.8%; profit hit ¥703.6 billion, up a stunning 66%.
MIIT named the three biggest profit drivers: integrated circuits, finished-computer manufacturing, and specialised electronic materials.
This means → chipmakers and computer builders are the main force behind this profit explosion — AI demand is pulling upstream manufacturing margins sharply higher.
The electronics sector's value-added grew 14.8%, outpacing overall industry by 9.4 percentage points — far ahead of every other industrial category.
How are software and internet companies doing?
Software and IT services revenue rose 9.5%; within that, IT-services revenue grew 10.4%.
Large-scale internet companies' revenue rose 10.1%, accelerating by 7 percentage points versus H1 last year; profit grew 16.6%.
This means → the internet sector, nearly stagnant a year ago, is clearly recovering — and profit growth is once again beating revenue growth.
What is the single most important question for H2?
Profit growth (19.3%) continues to outpace revenue growth (13.6%); profitability is still improving, and the trend has not peaked.
But the biggest open question sits on the computing side: intelligent computing surged 177% with massive capital deployed, yet rack utilisation at 71.4% still has room to rise.
In plain terms = the money has been spent and the machines are installed — what H2 must prove is: can all that computing power actually run at capacity and earn its keep? The answer determines whether this investment wave ends as "high returns" or "high inventory."
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