China's SMIC Raises Chip Prices as Artificial-Intelligence Demand Strains Capacity

BEIJING — China's largest semiconductor manufacturer has raised prices for some of its most sought-after production capacity as booming demand for artificial-intelligence hardware adds pressure to global chip supplies.

Semiconductor Manufacturing International Corporation, better known as SMIC, said AI-related orders remain strong and are expected to support demand throughout the second half of 2026.

The company generated more than $3 billion in quarterly revenue for the first time during the second quarter.

Profit attributable to shareholders tripled to $479.2 million, although part of the increase came from a one-off gain involving a subsidiary.

SMIC shipped approximately 2.9 million eight-inch-equivalent wafers during the quarter, 14% more than during the preceding three months.

Average wafer selling prices increased 5.7%.

SMIC is particularly important to China's efforts to reduce dependence on foreign semiconductor manufacturing.

It is currently China's only foundry able to mass-produce advanced logic chips such as CPUs and GPUs using a 7-nanometre production process.

Company executives said much of the latest demand is coming from AI-related chips other than CPUs and GPUs, particularly among Chinese customers.

SMIC's factories are operating close to capacity, with utilisation reaching approximately 93.7%.

The company says it will accelerate new production lines and adjust capacity to reduce bottlenecks.

SMIC expects third-quarter revenue to grow another 2%-4% from the second quarter.

The development illustrates a broader consequence of the artificial-intelligence boom: demand is extending beyond the most advanced Nvidia-style accelerators into memory, networking, power-management and other semiconductor categories.

That is placing pressure on manufacturing capacity across the industry and giving chip producers greater ability to increase prices.