AI demand drives triple-digit quarterly profit growth for Chinese foundries SMIC, Hua Hong

AI demand drives triple-digit quarterly profit growth for Chinese foundries SMIC, Hua Hong The results highlight how local foundries are aggressively running their fabrication plants at full capacity to meet domestic needs Net profits for SMIC and Hua Hong jumped 261.7 per cent and 385.9 per cent year on year to US$479.2 million and US$38.6 million, respectively, in the June quarter. Meanwhile, revenue at its smaller rival Hua Hong reached a record US$717.5 million in the quarter, up 26.8 per cent from a year earlier, compared with the consensus estimate of US$702.7 million. The results highlight how local foundries are aggressively running their fabrication plants at full capacity to meet domestic needs, as tech giants and start-ups scramble for computing power to train their large models and power AI applications. “Looking ahead to the second half of this year, the industrial momentum and spillover effects generated by AI will persist, driving broad-based demand for integrated circuit manufacturing,” SMIC said in a filing to the Hong Kong stock exchange on Thursday, adding that it would flexibly allocate existing capacity and accelerate new capacity to ease supply constraints.