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SMIC Says Trump Tariffs Didn’t Cause ‘Hard Landing’, Sees Capacity Tight Through October

Contingency measures have curbed additional tariff costs for overseas clients following a nearly 20% profit drop in the second quarter

Overview

  • Co-CEO Zhao Haijun reported that U.S. tariff policy failed to inflict the “hard landing” SMIC initially feared
  • Contingency plans enacted after reciprocal April duties are expected to keep new tariff costs below 10% for overseas customers despite President Trump’s proposed 100% chip import levy
  • Second-quarter revenue climbed 16.2% year-on-year to $2.2 billion while profit fell 19.5% to $132.5 million, missing analysts’ forecasts and triggering a more than 5% drop in Hong Kong shares
  • China remained the dominant market with 84% of SMIC’s Q2 sales while the U.S. contribution rose slightly to 12.9%
  • Strong domestic substitution demand has pushed capacity utilization to near full tilt and is projected to remain tight until October