China's two largest chip foundries, SMIC and Hua Hong, reported net profit up 261.7% and 385.9% year over year in the 2nd quarter, driven by demand for artificial intelligence semiconductors.
SMIC's profit came to US$ 479.2 million in the quarter ended in June. Hua Hong, SMIC's smaller rival, totaled US$ 38.6 million. Hua Hong's revenue reached US$ 717.5 million in the period, up 26.8% from a year earlier, surpassing the average estimate of US$ 702.7 million.
The results indicate that local foundries are operating at full capacity to meet domestic demand, while major technology companies and startups compete for computing power to train large models and power AI applications.
Outlook
In a document sent to the Hong Kong Stock Exchange on Thursday (13), SMIC said that the industrial momentum and spillover effects generated by AI will persist in the 2nd half, driving demand for integrated circuit manufacturing. The company said it plans to allocate capacity flexibly and accelerate expansion to ease supply constraints.
