The quarterly revenue of Semiconductor Manufacturing International Corporation (SMIC) has surpassed the $3 billion mark for the first time, according to its unaudited consolidated results for the three months ending June 30, 2026.
For the second quarter of 2026, the company's single-quarter sales revenue broke through the $3 billion threshold, with gross margin climbing to 25.3%. All core financial metrics exceeded expectations.
Key Financial Highlights from SMIC's Q2 2026 Report
Financial data reveals that in the second quarter of 2026, SMIC's sales revenue reached $3.006 billion, a sequential increase of 20.0% and a year-on-year rise of 36.1%. This marks the first time quarterly revenue has exceeded $3 billion. Gross profit for the quarter was $761 million, up 51.0% from the prior quarter and 69.1% year-on-year. The gross margin stood at 25.3%, a significant improvement of 5.2 percentage points from the first quarter's 20.1% and higher than the 20.4% reported in the same period last year, reaching a new high in over a year.
Operating profit for the second quarter was $534 million, surging 115.6% quarter-on-quarter and 254.5% year-on-year. Profit for the period was $733 million, a sequential increase of 217.5% and a year-on-year jump of 399.9%. Net profit attributable to shareholders of the parent company amounted to $479 million (approximately RMB 3.231 billion), a sequential growth of 142.7% and a year-on-year increase of 261.7%. Basic earnings per share were $0.06.
Notably, the "other net income" for the quarter reached $276 million, primarily due to an increase in income from associates and joint ventures, as well as gains from changes in the fair value of financial assets. Some associates are investment funds holding specific portfolios. Excluding these non-recurring factors, the improvement in the company's operational profitability was mainly driven by an increase in average selling prices and changes in product mix.
Consumer Electronics and Industrial Automotive Sectors Drive Growth, 12-Inch Wafer Share Rises to 78.2%
In terms of revenue composition, the share of revenue from the China region further increased to 90.2% in the quarter (compared to 84.1% in the same period last year), while the U.S. region's share fell to 8.2% and the Euro-Asia region accounted for 1.6%. This reflects a deepening localization of the customer base.
By application, consumer electronics maintained its position as the largest segment with a 44.2% share. Smartphones accounted for 16.9%, a significant decline from 25.2% in the same period last year. The industrial and automotive segment grew to 16.5%, a notable increase from 10.6% a year earlier and 14.0% in the first quarter, making it one of the most rapidly growing sectors. The computer and tablet segment contributed 15.6%, while connectivity and wearables made up 6.8%.
By wafer size, revenue from 12-inch wafers accounted for 78.2%, up from 76.4% in the first quarter. Analysts suggest that the recovery in demand from consumer electronics, industrial, and automotive sectors, coupled with the rising share of 12-inch wafer revenue, has shifted the product mix toward higher margins, which was the core driver of the significant gross margin improvement in the quarter.
Q2 Capacity Utilization Maintains High Level at 93.7%, Capital Expenditure Continues to Increase
Regarding capacity, the monthly capacity in the second quarter increased from 1,078,250 wafers (equivalent to 8-inch standard logic) in the first quarter to 1,096,500 wafers. Approximately 2.87 million wafers were sold during the quarter, a sequential increase of 14.4% and a year-on-year growth of 20.1%. Capacity utilization reached 93.7%, higher than the 93.1% in the first quarter and 92.5% in the same period last year, maintaining a high operating level.
Capital expenditure for the second quarter of 2026 was $1.836 billion, up from $1.563 billion in the first quarter, indicating a steady expansion pace. Net cash generated from operating activities was $2.522 billion, a significant improvement from $685 million in the first quarter. Cash and cash equivalents at the end of the period stood at $8.216 billion, reflecting ample cash reserves. Meanwhile, research and development expenses for the quarter were $209 million, with continued investment in R&D.
Third Quarter Guidance and Outlook: AI Spillover Effects Continue, Company Remains Optimistic
Looking ahead to the third quarter, SMIC expects quarterly revenue to grow sequentially by 2% to 4%, with a gross margin ranging between 26% and 28%, maintaining a steady growth trajectory. Company management commented, "In the second quarter, the company achieved sales revenue of $3 billion, a sequential increase of 20%. The gross margin was 25.3%, up 5.2 percentage points from the first quarter. For the third quarter, revenue is expected to grow by 2% to 4% sequentially, with a gross margin guidance of 26% to 28%. Looking ahead to the second half of the year, the industrial push and spillover effects generated by artificial intelligence will continue, bringing broad demand for integrated circuit manufacturing. The company is flexibly allocating existing capacity and rapidly validating new capacity to help alleviate supply chain bottlenecks. Overall, we maintain an optimistic view of the industry's direction and the company's development."
Industry Resonance: Wafer Foundry Sector Sees Comprehensive Recovery
On the same day, another leading wafer foundry in mainland China, Hua Hong Hongli, also released its performance report. Its second-quarter revenue was $718 million, with a gross margin of 16.5%, exceeding market expectations, and it projected a third-quarter gross margin of 16% to 18%. The synchronized performance of the two foundries confirms that, driven by global AI computing demand and the trend of domestic substitution, the wafer foundry industry in mainland China is experiencing a comprehensive recovery.
In the secondary market, as of the close on August 13, SMIC's A-shares rose over 1% to 129.44 yuan per share, with a total market capitalization of approximately 681.1 billion yuan. Its Hong Kong shares closed at 67.55 Hong Kong dollars per share, with a total market capitalization of about 787.3 billion Hong Kong dollars.
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