China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), reported record third-quarter revenue and a 123.4 percent increase in profit attributable to shareholders as artificial intelligence-related demand continued to support China’s semiconductor supply chain.
SMIC said in its Hong Kong Stock Exchange filing that revenue reached $3.19 billion in the three months ended September 30, up 33.9 percent from $2.38 billion a year earlier and 6.1 percent from the second quarter. Profit attributable to owners rose to $428.4 million from $191.8 million a year earlier, while total profit for the period increased 106.3 percent to $650.9 million.
Gross profit climbed 82.3 percent year on year to $953.2 million. Gross margin improved to 29.9 percent from 22 percent a year earlier and 25.3 percent in the preceding quarter, reflecting higher utilization and changes in the company’s product mix. SMIC’s utilization rate reached 97.3 percent, up 3.6 percentage points from the second quarter, while monthly production capacity increased to about 1.1 million eight-inch-equivalent wafers.
China accounted for 90.8 percent of quarterly revenue, compared with 86.2 percent a year earlier. America contributed 7.8 percent, and Eurasia accounted for 1.4 percent. Consumer electronics remained the largest application category at 40.6 percent of wafer revenue, followed by industrial and automotive products at 19.3 percent and computers and tablets at 18.3 percent.
Reuters reported that the shareholder profit and revenue figures exceeded analyst estimates compiled by LSEG. In a separate report following SMIC’s November 13 earnings call, Reuters attributed to co-chief executive Zhao Haijun the company’s assessment that AI-related semiconductor supply chains will remain tight through 2027 as demand from data centers and private-cloud operators continues.
That supply outlook is management commentary rather than an independent market forecast. SMIC also faces longer equipment lead times, which management said could affect the timing of capital spending. Third-quarter capital expenditure declined to $1.09 billion from $1.84 billion in the second quarter.
For the fourth quarter, SMIC expects revenue to grow between 4 percent and 6 percent sequentially, with gross margin between 26 percent and 28 percent. The company said it is adding capacity in response to customer demand, but did not disclose customer-level orders or separate revenue generated specifically by AI-related products.