China’s Semiconductor Manufacturing International Corp (SMIC) raised wafer prices as surging artificial intelligence demand tightened semiconductor supply, with the chipmaker expecting AI to continue underpinning orders in the second half of the year.
SMIC co-CEO Zhao Haijun said the company raised prices following negotiations with customers in the first quarter and would charge more for wafers processed in the third quarter as it seeks to narrow the gap with industry-leading prices.
The pricing move came as second-quarter revenue topped US$3 billion for the first time, beating LSEG analyst estimates, while profit attributable to shareholders tripled to US$479.2 million.
Wafer shipments rose 14% quarter-on-quarter to 2.9 million 8-inch-equivalent wafers, while average selling prices increased 5.7% as AI demand contributed to tighter supply chains.
Zhao said the increase in shipments was mainly driven by surging AI-related demand for chips beyond CPUs and GPUs, particularly from Chinese customers, alongside earlier-than-expected orders.
SMIC, the only Chinese foundry currently able to mass-produce logic chips such as CPUs and GPUs using a 7-nanometre process, plans to adjust existing capacity and accelerate new production lines to ease supply constraints.
Monthly production capacity rose 1.7% quarter-on-quarter to 1.1 million 8-inch-equivalent wafers, with utilisation reaching 93.7%.
China accounted for 90% of second-quarter revenue while the US contributed 8%. SMIC expects third-quarter revenue to increase 2% to 4% from the second quarter as wafer shipments continue to rise.
Reuters
