China’s two largest contract chipmakers saw triple‑digit profit growth in the June quarter as demand surged for domestic artificial‑intelligence chips not subject to US export controls.
Net profits for Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Grace Semiconductor rose 261.7% and 385.9% year on year to US$479.2 million and US$38.6 million, respectively, in the quarter ending in June.
SMIC, the country’s largest foundry, reported revenue of US$3.0 billion for the three months ending June, up 36% year on year and roughly in line with the consensus estimate of US$2.9 billion.
Hua Hong posted a record quarterly revenue of US$717.5 million, a 26.8% increase from a year earlier, compared with a consensus estimate of US$702.7 million.
AI demand and capacity
Local foundries are running fabrication plants at high utilisation to meet domestic needs as tech giants and start‑ups compete for computing power to train large models and power AI applications. SMIC said in a filing to the Hong Kong stock exchange on Thursday: “Looking ahead to the second half of this year, the industrial momentum and spillover effects generated by AI will persist, driving broad‑based demand for integrated circuit manufacturing,” adding that it would flexibly allocate existing capacity and accelerate new capacity to ease supply constraints.
