Chinese Chipmakers SMIC and Hua Hong Report Record Profit Growth

Chinese Foundries Report Triple-Digit Profit Surge Amid AI Boom

China’s leading chipmakers, SMIC and Hua Hong, have posted staggering profit growth for the June quarter, driven by surging demand for artificial intelligence (AI) applications. SMIC’s net profit soared by 261.7% year-on-year to $479.2 million, while Hua Hong reported an even sharper rise of 385.9%, reaching $38.6 million.

Record Revenue for Hua Hong
Hua Hong also achieved record quarterly revenue of $717.5 million, marking a 26.8% increase compared to the same period last year. This figure exceeded market expectations, which had pegged revenue at $702.7 million. The company’s performance underscores the intense domestic demand for chip fabrication as tech firms and start-ups ramp up efforts to train large AI models and deploy cutting-edge applications.

AI Fuels Industry Momentum
SMIC highlighted the transformative impact of AI on the semiconductor industry in a filing to the Hong Kong stock exchange. The company stated that the "industrial momentum and spillover effects generated by AI will persist" through the second half of the year. To address supply bottlenecks, SMIC plans to flexibly allocate existing capacity while accelerating the development of new production facilities.

Why It Matters
The explosive growth in profits and revenue for these foundries signals China’s determination to meet domestic semiconductor needs amid geopolitical tensions and global supply chain disruptions. AI-driven demand is reshaping the industry, pushing fabrication plants to operate at full capacity to cater to a rapidly evolving tech landscape.

Source: South China Morning Post