SMIC Shares Rally as Q2 Profit Surges 262% on Strong Chip Demand

Shares of Semiconductor Manufacturing International Corp. (SMIC) surged on Friday after the Chinese semiconductor foundry delivered strong second-quarter earnings, supported by higher chip demand, improved pricing and increased wafer shipments.

SMIC reported revenue of $3.01 billion for the three months ended June, representing a 36.1% increase from the same period last year. Profit attributable to shareholders climbed 261.7% year-on-year to $479.2 million, highlighting a significant improvement in the chipmaker’s financial performance.

Following the results, Hong Kong-listed SMIC shares jumped as much as 6.4% to HK$71.90 by 03:27 GMT, as investors reacted positively to the earnings growth and an encouraging outlook for semiconductor demand.

The company’s gross margin improved to 25.3%, compared with 20.4% a year earlier. SMIC attributed the expansion partly to higher average selling prices and a stronger product mix.

Operational performance also strengthened during the quarter. Wafer shipments increased 20.1% year-on-year, while capacity utilization reached 93.7%, up from 92.5% in the corresponding period last year.

Looking ahead, SMIC expects third-quarter revenue to grow between 2% and 4% sequentially. The company projects a gross margin of 26% to 28%, suggesting further profitability improvements could be ahead.

SMIC said momentum surrounding artificial intelligence and related industries, along with spillover demand across the semiconductor market, should continue supporting chip manufacturing activity during the second half of the year. The company also plans to speed up the qualification of new production capacity.

The upbeat SMIC earnings helped lift sentiment across Asian semiconductor stocks as investors remained focused on AI-driven chip demand and industry capacity expansion.

South Korea’s SK Hynix gained around 3%, while Taiwan Semiconductor Manufacturing Co. rose 1%. Japan’s Advantest advanced 4%. In the U.S., Micron Technology shares climbed 4.2% in New York trading, adding to positive momentum across the global semiconductor sector.