Key Points:
- Semiconductor Manufacturing International Corporation reported second-quarter profit that more than tripled to $479.2 million, beating analyst estimates.
- Total revenue topped $3 billion for the first time in the company’s corporate history, driven heavily by artificial intelligence demand.
- Co-CEO Zhao Haijun confirmed that the foundry raised prices for its most sought-after capacity following client negotiations.
- The company shipped 2.9 million 8-inch-equivalent wafers, while the average selling price of wafers rose by 5.7%.
The global semiconductor manufacturing landscape continues to experience tight supply chains and rising valuations. Semiconductor Manufacturing International Corporation, the largest contract chipmaker in China, announced that it has increased prices for its most sought-after production capacity. This strategic pricing adjustment comes on the heels of a stellar financial report that highlighted massive profit expansion driven by artificial intelligence workloads.
During an earnings call with investors and analysts, Co-CEO Zhao Haijun explained that the foundry successfully raised prices following customer negotiations. Management confirmed that higher rates will apply to silicon wafers processed through upcoming production quarters. Executive leadership noted that a clear valuation gap remains between global industry-leading wafer prices and current regional charges, necessitating more competitive pricing to reflect top-tier manufacturing standards.
The decision to boost prices is supported by exceptional financial performance. For the second quarter, SMIC posted revenue exceeding $3 billion for the first time, marking a 36% jump compared to the previous year and easily topping Wall Street expectations. More impressively, profit attributable to shareholders more than tripled, reaching $479.2 million and nearly doubling average analyst forecasts.
Operational metrics underscore the heavy factory utilization rates across the company’s fabrication plants. During the three-month period, the foundry shipped 2.9 million 8-inch-equivalent wafers, representing a 14% increase from the prior quarter. Simultaneously, the average selling price of these processed wafers rose by 5.7%, reflecting global supply tightness and strong local demand for specialized microchips. Executive leadership attributed this momentum primarily to surging artificial intelligence applications and components operating outside traditional central processing units and graphics processing units.
Looking ahead to the remainder of the year, company executives expect artificial intelligence-related industrial momentum to persist. As global technology firms and regional startups scramble for computing power to train and deploy complex machine learning models, local foundries plan to allocate capacity flexibly. By optimizing existing lines and ramping up new production facilities, SMIC aims to ease regional supply constraints while capitalizing on the ongoing artificial intelligence supercycle.
