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Chinese Chipmaker SMIC Raises Prices as AI Demand Grows

BEIJING — August 14, 2026

China’s largest chip foundry, Semiconductor Manufacturing International Corp (SMIC), has raised prices for some of its most in-demand production capacity as strong artificial intelligence demand continues to support orders. The company said AI demand is expected to remain a major source of business in the second half of the year.

SMIC Co-CEO Zhao Haijun said the company negotiated higher prices with customers during the first quarter and would charge more for wafer production in the third quarter. Wafers are thin pieces of semiconductor material on which chip circuits are created.

The pricing changes come as SMIC reported quarterly revenue of more than $3 billion for the first time. Revenue and profit both exceeded average analyst expectations, with profit attributable to shareholders reaching $479.2 million, nearly three times the level recorded a year earlier.

The company said strong AI-related demand helped drive its performance. SMIC is the only Chinese chip foundry currently able to mass-produce logic chips such as central processing units and graphics processing units using a 7-nanometre manufacturing process.

SMIC shipped the equivalent of 2.9 million 8-inch wafers during the second quarter, an increase of 14% from the previous quarter. Its average wafer selling price rose 5.7% as demand for semiconductors linked to AI contributed to tighter supply conditions around the world.

Zhao said much of the increase in shipments came from stronger demand for chips other than CPUs and GPUs, particularly from customers in China. Some customers also placed orders earlier than the company had expected.

The increase in net profit was partly supported by a one-time gain from one of SMIC’s subsidiaries, Chief Financial Officer Wu Junfeng said. This means the full increase in profit does not entirely reflect recurring operating performance.

SMIC expects demand for its foundry services to remain strong through the second half of the year as companies continue investing in AI-related technology. The company plans to adjust existing production capacity and bring new production lines online faster in an effort to address supply shortages.

SMIC’s monthly production capacity increased 1.7% from the previous quarter to about 1.1 million 8-inch-equivalent wafers. Its factory utilisation rate, which measures how much of its available production capacity is being used, reached 93.7%, slightly higher than in the first quarter.

The company also added capacity for 8,000 12-inch wafers per month during the second quarter. SMIC reported $2.3 billion in depreciation and other equipment-related costs during the first half of the year and expects the full-year figure to reach about $5 billion, around 30% higher than in 2025.

China remained SMIC’s main market, accounting for about 90% of its second-quarter revenue. Customers in the United States contributed about 8%, highlighting the company’s heavy reliance on Chinese demand.

SMIC spent $3.4 billion on capital investment during the first half of the year, compared with $3.3 billion during the same period last year. The company expects third-quarter revenue to increase by 2% to 4% from the second quarter, with wafer shipments also expected to rise.

The results underline the growing impact of AI on semiconductor manufacturing in China and globally. For SMIC, continued demand provides an opportunity to increase production and prices, while high factory utilisation and rising investment show the significant costs involved in expanding chipmaking capacity.