SMIC

Business

SMIC (中芯国际集成电路制造有限公司) is a pure-play foundry: customers hand it chip designs and it manufactures the wafers. The company describes itself as one of the leading foundries in the world and the front runner in manufacturing capability, scale and comprehensive service in mainland China, providing foundry and technology services on 8-inch and 12-inch wafers (Q2 2026 results announcement). It is headquartered in Shanghai, with 8-inch and 12-inch fabs in Shanghai, Beijing, Tianjin and Shenzhen, and sales offices in the US, Europe, Japan and Taiwan.

In the second quarter of 2026, 12-inch wafers were 78.2% of wafer revenue and 8-inch wafers 21.8%. By application, consumer electronics were 44.2% of revenue, smartphones 16.9%, industrial and automotive 16.5%, computers and tablets 15.6%, and connectivity and IoT 6.8%. By geography, mainland China was 90.2% of revenue, America 8.2% and Eurasia 1.6%.

Scale and mix

• Revenue was US$3,005.6m in the second quarter of 2026, up 20.0% from the first quarter and 36.1% from a year earlier, on higher wafer shipments, higher average selling prices and a changed product mix (Q2 announcement). First-half revenue reached US$5.51bn, up 23.7% year on year, with profit attributable to owners of US$676.6m (2026 interim results announcement).
• Gross margin was 25.3% in the second quarter, up 5.2 points from the first quarter, and 22.9% for the half. Profit attributable to owners in the quarter was US$479.2m, against US$197.4m in the first quarter.
• Wafer shipments were 2,869,495 8-inch equivalent wafers in the quarter, up 14.4% sequentially, and utilisation was 93.7%. Monthly capacity rose to 1,096,500 8-inch equivalent wafers.
• Capital expenditure was US$1,835.7m in the quarter and US$1,562.8m in the first quarter, about US$3.4bn for the half. The company guided third-quarter revenue up 2% to 4% sequentially with a gross margin of 26% to 28%.

Caveats

The company own forward-looking statement lists the risks that matter most for a foundry: cyclicality and market conditions, intense competition, timely wafer acceptance by customers, timely introduction of new technologies, ramping new products into volume, shortages of equipment, parts, raw materials, software and service support, and geopolitical risk (Q2 announcement). Its second-quarter other income of US$275.9m, against US$7.5m in the first quarter, was driven largely by fair value changes on equity securities and investment funds, not by wafer sales, so the headline profit jump overstates the operating improvement.