Chinese chipmaker SMIC increases prices on strong AI demand

Business Recorder reported that China's Semiconductor Manufacturing International Corp, known as SMIC, expects demand tied to artificial intelligence to keep its orders strong. Co-CEO Zhao Haijun told an earnings call that the company raised prices for its most sought-after capacity after discussions with buyers during the first quarter, and that charges will go up again in the third quarter. He argued that industry-leading wafer rates still sit well above SMIC's current levels, so more negotiations are needed.

Second-quarter revenue exceeded $3 billion for the first time, while profit attributable to shareholders tripled to $479.2 million, and both figures topped mean analyst forecasts tracked by LSEG. Shipments of 2.9 million 8-inch-equivalent wafers climbed 14% from the previous quarter, and the average selling price rose 5.7%. CFO Wu Junfeng added that a one-time gain from a subsidiary also lifted net profit.

Management expects third-quarter revenue to grow 2% to 4% from the second quarter, and it plans to adjust existing capacity while speeding up new production lines. Capital spending reached $3.4 billion in the first half, and China accounted for 90% of second-quarter revenue. Shares climbed 5% after the call, though they remain 0.21% lower so far this year.