Net profits for China’s Semiconductor Manufacturing International Corporation (SMIC) increased by 261.7 per cent year on year to US$479.2 million in the June quarter.
Hua Hong Grace Semiconductor, the country’s second-largest contract chipmaker, saw its net profits jump 385.9 per cent year on year to US$38.6 million during the same period. The surge in profits for both companies was driven by a spike in demand for domestic artificial intelligence chips.
Revenue and margins rise
SMIC’s revenue reached US$3.01 billion, representing a 20 per cent increase from the first quarter and approximately 36 per cent growth compared to the previous year’s quarter. The company also reported that its gross margin rose from 20.1 to 25.3 per cent, an increase of 5.2 percentage points.
Hua Hong Grace Semiconductor’s revenue reached a record US$717.5 million in the June quarter, up 26.8 per cent from a year earlier. This figure exceeded the consensus estimate of US$702.7 million.
Industry outlook and context
SMIC stated that looking ahead to the second half of this year, the industrial momentum and spillover effects generated by AI will persist, driving broad-based demand for integrated circuit manufacturing.
SMIC stated that overall they remain “optimistisch und zuversichtlich hinsichtlich Branchentrend und Unternehmensentwicklung” (optimistic and confident regarding industry trends and company development).
SMIC works closely with Chinese chip designers such as Huawei's Hisilicon, Unisoc, or CXMT.
The Chinese government promotes high technology, particularly in electric drives, robotics, and AI, and intends to continue or deepen this course according to the five-year plan for 2026 to 2030.
SMIC did not provide a breakdown of what proportion of its revenue is attributed to AI-specific chips.
