Key facts
- SMIC and Hua Hong experienced triple-digit quarterly profit growth.
- Demand for AI chips is driving increased orders for peripheral chips.
- SMIC has increased prices for its most in-demand chip capacity.
- SMIC is considering expanding its production capacity.
- SMIC reported record revenue.
Chinese semiconductor manufacturers SMIC and Hua Hong have seen substantial profit increases, driven by a surge in demand for chips used in artificial intelligence applications. SMIC, in particular, has reported record revenue and has implemented price hikes for its most sought-after production capacity.
The company noted that investments in AI are boosting demand for peripheral chips, and despite some market weaknesses, SMIC has no plans to lower prices. The strong demand has led SMIC to consider expanding its manufacturing capacity, as current projections for AI-related chip demand are exceeding forecasts.
This surge in demand highlights the growing importance of Chinese chipmakers in the global AI supply chain, even amidst broader market fluctuations and geopolitical considerations.