SMIC Doubles Profit and Hits Record Revenue as AI Demand Spills Over

what happened

SMIC, China's largest contract chipmaker, more than doubled its third-quarter net profit to $428.4 million from $191.8 million a year earlier, Dow Jones Newswires reported. Revenue climbed 34% to a record $3.19 billion. Analysts polled by Visible Alpha had expected profit of $396.8 million.

Demand for AI computing has lifted orders beyond advanced nodes, including mature-node parts used in power management, connectivity and peripheral logic. Global foundries are shifting capacity toward AI work, and some clients have moved mature-node orders to Chinese producers. Gross margin reached 29.9%, above the forecast range, helped by higher wafer prices and a richer product mix.

For the fourth quarter, SMIC expects revenue to rise 4% to 6% sequentially and gross margin between 26% and 28%. The company said it has expanded capacity to meet customer needs and added higher-value premium products. Co-CEO Zhao Haijun said in August that price increases would gradually show up in earnings.

why it matters

The results point to sustained demand for mature-node chips in China and suggest that pricing is supporting margins. Investors will watch whether higher prices and factory utilization hold up in the coming quarters.

market impact

SMIC shares and Chinese chipmakers: stronger earnings and higher prices support the sector

• ▲SMIC shares (0981.HK) pressure up — profit beat expectations and higher wafer prices lift margins

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