SMIC Considers $3 Billion Revenue Expansion to Meet AI Demand

China's largest foundry company, SMIC, is reviewing the expansion of its production facilities in response to the growing demand for semiconductors for AI servers and data centers. In the second quarter, revenue reached $3.01 billion, a 36.1% increase compared to the same period last year. Co-CEO Zhao Haijun stated that they are considering adding equipment to existing factories. The increase in orders for auxiliary semiconductors for AI servers and data centers has intensified supply shortages, with some product orders expected to extend until 2027. The production facility utilization rate in the second quarter rose to 93.7%, up from the first quarter, and wafer shipments increased by 14.4%. SMIC has announced that it will not operate its production facilities at full capacity, setting a utilization cap at 95%, with the remaining 5% allocated for research and development. The gross profit margin for the second quarter increased to 25.3%, and revenue for the third quarter is expected to rise by 2-4% compared to the previous quarter. The proportion of Chinese customers is 90%, with the increase in demand for AI-related semiconductors and the recovery of overseas orders driving revenue growth.

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