SMIC (00981) saw its shares rise more than 5% during the morning trading session. As of the time of writing, the stock was up 5.4%, trading at HK$72.2 with a turnover of HK$25.19 billion.
The company announced that, based on customer demand and its current order backlog, it holds a more optimistic outlook for its overall operational performance this year compared to the previous quarter. This optimism is primarily driven by several factors: strong demand for supporting chips from artificial intelligence, which has directly led to supply shortages for the company's power management chips; the overseas siphon effect of AI, which is prompting consumer and IoT clients to seek production capacity and order回流 within mainland China; AI also stimulating new application demand in areas such as ToF, electric vehicles, and robotics, with local companies actively expanding their market presence; the push for supply chain localization, which is increasing demand for domestic logic and networking communication chips; price increases; and proactive inventory building by clients concerned about future supply constraints.
An analysis report noted that SMIC's production capacity reached 1.08 million wafers per month (converted to 8-inch equivalents) by the end of the first quarter, with a capacity utilization rate of 93.1%, showing a slight sequential decline mainly due to consumer electronics and seasonal factors. Capital expenditures stood at US$1.56 billion, with depreciation and amortization reaching US$1.088 billion, a year-on-year increase of 25.7%. However, gross margin did not see a significant decline, reflecting the current industry upcycle and the offsetting effect from the company's high capacity utilization.
The report forecasts that 2026 will be a pivotal year for SMIC, marked by accelerated revenue realization alongside concurrent depreciation pressures. For the second quarter, SMIC has guided for a sequential revenue growth of 14% to 16%, which is attributed to the combined effect of rising capacity utilization and average selling prices.
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