Chinese chipmaker SMIC increases prices on strong AI demand

Beijing, Aug 13 (Reuters) - China's leading chip manufacturer, SMIC, announced on Friday that it had increased prices for its most sought-after wafer capacity following negotiations with customers in the first quarter. Co-CEO Zhao Haijun stated that SMIC would continue to price its production based on AI-related demand, which is projected to persist in the second half of the year.

The company posted revenue above $3 billion for the first time in the second quarter, with profit attributable to shareholders tripling to $479.2 million, both exceeding analyst expectations. SMIC's shipments of 8-inch-equivalent wafers rose 14% to 2.9 million for the quarter, while the average selling price increased by 5.7%. The surge in wafer shipments was primarily driven by robust demand from Chinese customers in AI-related chip production, as well as earlier-than-anticipated orders.

SMIC's utilization rate reached 93.7%, a slight improvement from the first quarter, and the company added 8,000 wafers of monthly 12-inch capacity during the second quarter. Capital spending in the first half amounted to $3.4 billion, with the company anticipating full-year amortisation of around $5 billion, a 30% increase year-on-year.