SMIC profit more than triples as AI chip demand surges

Semiconductor Manufacturing International Corp, China's largest contract chipmaker, reported on Thursday that second-quarter profit more than tripled from a year earlier, handily beating analyst expectations as demand for AI-related chips continued to surge.

Earnings Far Exceed Forecasts

Profit attributable to shareholders came in at $479.2 million, nearly double the average analyst estimate of $253.4 million compiled by LSEG, according to Reuters. Revenue rose 36% to more than $3 billion, topping the $2.8 billion analysts had forecast.reuters+1

The results underscore how artificial intelligence is reshaping semiconductor demand across the supply chain, benefiting not only cutting-edge chipmakers but also foundries focused on mature-node production. The Wall Street Journal News Corp ↘ 3.58% reported that non-AI industries are facing a critical shortage of semiconductors as global foundries prioritize capacity for AI-related needs, leading international and domestic customers to shift mature-node manufacturing orders to China.wsj

AI Demand Drives Outlook

SMIC said in a stock exchange filing that AI would continue to drive robust chip demand in the second half of 2026, adding that it would adjust existing capacity and accelerate the ramp-up of new production lines to help ease industry-wide supply constraints.thestandard+1

The company's strong quarter reflects a broader trend of surging orders for legacy and specialty chips that support AI infrastructure, from power management to connectivity components. As advanced-node capacity remains tight globally, mature-node foundries like SMIC have emerged as key beneficiaries of the overflow demand.

Geopolitical Context

The results arrive amid ongoing U.S. restrictions on China's access to advanced chipmaking equipment, which have pushed SMIC to maximize output from its existing technology. Despite those constraints, the company's revenue growth and profit margins suggest it has found a profitable niche serving customers squeezed by global capacity shortages driven by the AI buildout.