SMIC Sees 2026 Revenue Above $12 Billion on AI Demand Spillover

what happened

SMIC, China's largest contract chip manufacturer, expects annual revenue to exceed $12 billion as it benefits from the global artificial intelligence boom. The company also warned that tight equipment supply could disrupt its investment plans, Dow Jones Newswires reported.

Third-quarter revenue rose 34% from a year earlier to a record $3.19 billion, while net profit more than doubled to $428.4 million. The company now expects a gross margin of around 26% and revenue growth of about 30% from 2025.

Bernstein analysts said demand for SMIC's products is increasingly driven by industrial and computing uses rather than consumer markets. Third-quarter capital spending fell from the previous quarter, but management said this does not signal a slowdown. Full-year capex could come in slightly below earlier expectations. Shares rose as much as 7.3% in Hong Kong before the gains eased to 2.0%.

why it matters

Two signals matter for markets: strong revenue momentum tied to AI chip demand, and a warning that equipment shortages could slow capacity expansion. For China's chip sector, the results point to sustained demand, with logic and supporting chips expected to stay in short supply.

market impact

SMIC shares and Chinese chipmakers: strong results and outlook support the sector

• ▲SMIC shares pressure up — strong results and a higher revenue outlook support the stock

tags

instruments