Key facts
- SMIC co-CEO Zhao Haijun said AI computing chips and supporting semiconductors may stay in short supply past mid-2028.
- SMIC expects fourth-quarter gross margin of 26% to 28%, down from 29.9% in the third quarter.
- SMIC guided fourth-quarter revenue growth of 4% to 6% quarter on quarter.
- Zhao said suppliers now quote equipment lead times of 16 to 24 months for new orders.
- China accounted for 90.8% of SMIC's quarterly revenue, while the US share fell to 7.8% from 8.2%.
- SMIC expects full-year 2026 revenue above $12 billion, up nearly 30% year on year.
China's Semiconductor Manufacturing International Corporation expects artificial intelligence computing power to remain in short supply for the next two years, co-CEO Zhao Haijun said on November 13, 2026. Zhao said industry consensus points to severe capacity constraints through 2027, with shortages likely extending into mid-to-late 2028. AI-related memory supply and demand could reach rough balance after mid-2028, he said, while computing chips and other supporting semiconductors may stay tight.
SMIC reported third-quarter profit of $428.4 million, up 123.4%, and revenue of $3.19 billion, up 33.9% year on year, according to Reuters. Utilization rose to 97.3% from 93.7% in the prior quarter and gross margin reached 29.9%, Star Market Daily and Ijiwei reported. China accounted for 90.8% of quarterly revenue, while the US share slipped to 7.8% from 8.2%, Reuters reported.
Zhao warned that tight global chipmaking equipment supplies and longer delivery schedules could disrupt SMIC's full-year spending plans, though its 2026 capacity expansion remains on track. Suppliers are quoting lead times of 16 to 24 months for new equipment orders, he said. SMIC said it would adjust pricing in line with industry trends, prioritize the most capacity-constrained segments and negotiate price increases with customers, Star Market Daily reported.
For the fourth quarter, SMIC expects gross margin to retreat to 26% to 28% even as revenue grows 4% to 6% quarter on quarter, with rising depreciation and raw material costs weighing on profitability. For full-year 2026, Zhao expects revenue above $12 billion, up nearly 30% year on year, and gross margin around 26%.