SMIC profit more than doubles as AI demand lifts sales to a record $3.19 billion; co-CEO sees 2026 revenue above $12 billion
China's biggest chipmaker SMIC reported record third-quarter revenue of $3.19 billion and net profit of $428.4 million, beating forecasts, as its co-chief executive said AI demand could stretch the chip upcycle and lift full-year revenue above $12 billion.
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China's largest contract chipmaker had its best quarter yet. Semiconductor Manufacturing International Corp reported third-quarter revenue of $3.19 billion, up 34% on a year earlier, and net profit of $428.4 million, more than double the figure a year ago and ahead of the $418.4 million analysts had expected.
Gross margin reached 29.9%, up from 25.3% in the second quarter and 22.0% a year earlier, as higher wafer prices and a richer mix of products flowed through. Co-chief executive Zhao Haijun told the earnings call he expects full-year revenue to top $12 billion, up nearly 30% on last year, with gross margin of about 26%, arguing that demand from artificial intelligence could stretch the current chip upcycle well beyond the leading-edge foundries.
The guidance for the final quarter is more restrained: revenue up 4% to 6% on the third quarter, with margin of 26% to 28%. Zhao also warned that tight global supplies of chipmaking equipment, and longer delivery times, could disrupt the timing of capital spending. Hong Kong-listed SMIC shares have fallen about a fifth so far this quarter, on top of a 32% drop in the third quarter, even as the numbers improved.
The headline figures come from SMIC's own results, released on Thursday, and match the Reuters account of them, which used LSEG data for the analyst forecasts. The $12 billion full-year figure is Zhao's expectation on the earnings call, not a formal guidance revision, and the equipment warning is his own caveat rather than a cut to spending plans. The margin path matters here: the fourth-quarter guide sits below the third quarter's 29.9%, so the record quarter does not by itself promise a better one next.
SMIC's quarter is evidence of how far the AI boom has spread. The leading foundries are devoting their capacity to advanced AI chips, so customers in China and abroad are turning to SMIC for the mature-node chips that go into everything else. If Zhao is right that the upcycle has further to run, the constraint on SMIC is no longer demand but machines: the tools it needs are themselves in short supply, and that shortage now sets the pace of its expansion.