China's Semiconductor Manufacturing International Corporation (SMIC) is raising wafer prices for its most sought-after capacity as AI-related demand keeps its factories at 93.7% utilization. On Friday's earnings call, co-CEO Zhao Haijun told investors SMIC negotiated higher prices with customers in the first quarter and will charge more for wafers processed in Q3, arguing the current gap between industry-leading pricing and SMIC's is unfair.
First $3B Quarter, Profit Triples To $479M
Revenue reached $3.01 billion in Q2 2026, up 20% quarter-on-quarter and 36.1% year-on-year, the first time SMIC has cleared the $3 billion mark in a quarter. Profit attributable to shareholders more than tripled to $479.2 million, beating LSEG's average analyst estimates. Gross margin improved 5.2 percentage points to 25.3%. Shipments hit 2.9 million 8-inch-equivalent wafers, up 14% sequentially, with average selling prices rising 5.7%.
AI Beyond CPUs And GPUs
The volume gains came from “surging AI-fuelled demand for chips other than CPUs and GPUs,” Zhao said, with orders concentrated among China-based customers and some arriving ahead of schedule. SMIC is the only Chinese foundry mass-producing 7-nanometre logic chips. Monthly capacity rose 1.7% quarter-on-quarter to 1.1 million 8-inch-equivalent wafers, and the company added 8,000 wafers of new 12-inch capacity in Q2.
Guidance And Capex
SMIC expects Q3 revenue to rise 2–4% sequentially with wafer shipments continuing to grow. China accounted for 90% of Q2 revenue, the US just 8%. First-half capital spending totaled $3.4 billion, and full-year amortisation is guided to about $5 billion, up 30% year on year. See related: SMIC-SMNC foundry acquisition and Anthropic's in-house chip team.
Reporting based on coverage from Reuters via Business Recorder, DIGITIMES and SMIC's Q2 2026 earnings call.