Semiconductor Manufacturing International Corp (SMIC) reported on Thursday its net profit more than tripled in the first half of 2024, driven by strong demand for AI-related chips.
The Shanghai-based foundry, China’s largest contract chipmaker, posted a net income of 11.2 billion yuan ($1.55 billion) for the six months ended June 30, up from 3.3 billion yuan a year earlier. Revenue rose 47% to 38.8 billion yuan, the company said in a filing to the Hong Kong stock exchange.
SMIC attributed the surge to robust demand for advanced process nodes, particularly from AI applications. The company’s 7-nanometer and 14-nanometer chips are increasingly used in data centers, smartphones and high-performance computing devices.
Gross margin expanded to 24.3% from 10.5% in the same period last year, reflecting improved pricing power and higher utilization rates at its fabrication plants. Operating expenses totaled 4.2 billion yuan, up 18% year-over-year.
The company’s shares closed 2.1% higher in Hong Kong on Thursday, outperforming the broader market. SMIC’s stock has gained nearly 30% in 2024, outpacing many global peers amid investor optimism over China’s semiconductor sector resilience.
Analysts noted that while U.S. export restrictions on advanced chipmaking equipment to China remain a risk, SMIC has managed to scale production using domestically sourced tools. The company has also expanded its capacity in mature process nodes, which are less affected by geopolitical constraints.
SMIC’s latest results underscore the growing role of AI in reshaping semiconductor demand, even as global supply chains adapt to geopolitical pressures.
