2 weeks ago
SMIC Raises Chip Prices as AI Demand Boosts Record Revenue
SMIC is a big company in China that makes computer chips — the tiny parts that help phones, computers, and robots think.
Right now, lots of companies want chips that help computers learn and solve problems, which is called artificial intelligence (AI).
Because so many people want these chips, SMIC decided to charge a little more for them.
It made more chips than ever before and earned more than three billion dollars in just three months.
Its profit tripled compared to before.
Almost all of its customers are in China, and it is the only company there that can make the most advanced chips.
SMIC plans to keep making even more chips in the coming months.
It will build new production lines so there are enough chips for everyone who wants them.
SMIC raised wafer prices after customer negotiations in the first quarter and will charge more for wafers processed in the third quarter.
Second-quarter revenue exceeded $3 billion for the first time, with profit attributable to shareholders tripling to $479.2 million.
Wafer shipments rose 14% from the previous quarter to 2.9 million 8-inch-equivalent wafers, driven mainly by AI demand from China-based customers.
SMIC is the only Chinese foundry able to mass-produce logic chips such as CPUs and GPUs on a 7-nanometre process.
SMIC expects third-quarter revenue to grow 2% to 4% and plans to accelerate new production lines to ease supply constraints.
- Who
- Zhao Haijun, co-CEO of SMIC (Semiconductor Manufacturing International Corp), and CFO Wu Junfeng; SMIC is China's top foundry.
- What
- SMIC raised wafer prices for its most sought-after capacity and posted record quarterly revenue and profit driven by strong AI demand.
- Where
- China — the country accounted for 90% of SMIC's second-quarter revenue.
- When
- Announced during the second-quarter earnings call on a Friday; higher prices apply to wafers processed in the third quarter.
- Why
- Surging AI-related demand is tightening global semiconductor supply chains, allowing SMIC to negotiate higher prices.
Key facts
- Company
- Semiconductor Manufacturing International Corp (SMIC), China's top foundry
- Q2 revenue
- Above $3 billion for the first time
- Q2 profit attributable to shareholders
- $479.2 million, tripled year-on-year
- Q2 wafer shipments
- 2.9 million 8-inch-equivalent wafers, up 14% quarter-on-quarter
- Average wafer selling price
- Up 5.7% in the second quarter
- Capacity utilisation
- 93.7%
- China revenue share
- 90% of second-quarter revenue (U.S. 8%)
- Q3 outlook
- Revenue expected to rise 2% to 4% from the second quarter
Quotes
Zhao Haijun
Co‑CEO of SMIC
“Since there’s still a big gap between industry‑leading wafer prices and SMIC’s current prices, we need to negotiate with customers for fairer pricing.”
CNBC TV 18
“We believe we’ve reached top‑tier industry standards in these areas.”
CNBC TV 18
Sources
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