Overview
- SMIC, which reported results Thursday, posted Q2 net profit attributable to shareholders of $479.2 million, more than triple the year-earlier level.
- The company recorded a 25.3% gross margin in the quarter, well above analyst expectations of about 21.4%.
- SMIC guided for 2% to 4% sequential revenue growth in Q3 2026 and said it will flexibly allocate and expand capacity to meet demand.
- The blowout quarter was powered by orders for AI-related chips that can be made on mature and mid-range process nodes, such as inference chips, edge processors, and AI accelerators.
- U.S. export controls that limit sales of advanced lithography and high-end chip designs keep SMIC from reaching leading-edge nodes, leaving its long-term node-downscaling prospects uncertain and sustaining TSMC’s technological lead.