<div id="readability-page-1">Semiconductor Manufacturing International Corp (SMIC), China’s largest contract chipmaker, said it expected first quarter revenue to remain flat as a decline in low-end orders partly offset surging demand for chips used in artificial intelligence applications. SMIC reported on Tuesday that 2025 revenue increased 16.2 per cent from a year earlier to US$9.3 billion, while net profit surged 39 per cent to US$685.1 million. The growth was mainly due to increases in wafer shipment and utilisation rate, as well as changes in product mix, SMIC said. However, profit for both the full year and the fourth quarter fell short of analyst estimates, and the company’s Hong Kong-listed shares dropped 3 per cent to HK$69.40 on Wednesday morning. Its Shanghai-listed stock fell 1.3 per cent to 114.70 yuan. In an earnings call on Wednesday, Zhao Haijun, co-CEO of SMIC, said the company had seen orders from smartphone vendors and makers of other lower-end products “squeezed” by strong demand for AI chips, leading to the company’s flat revenue expectation. However, he added that the company was “still well positioned in the current industry development cycle”, adding that SMIC would proactively address urgent market demand to drive revenue growth in 2026. The industry is in the grip of a massive supply crunch for memory chips, as a frantic ramp-up of production for advanced chips to feed demand from AI data centres eats up global wafer capacity and drives up costs across the supply chain. This has forced some companies, including smartphone makers, to reduce production plans. Shanghai-based SMIC, which anchors Beijing’s drive for semiconductor self-reliance, shipped a total of 9.7 million wafers in 2025, up 21 per cent from 8 million a year earlier. Capacity utilisation rose by 8 percentage points year on year to 93.5 per cent. SMIC recently began a 10 per cent price increase across certain production lines, driven by a surge in demand for power-management chips and AI-related hardware, according to Chinese media reports in December.  China’s push for chip self-sufficiency continues to drive domestic demand for SMIC’s products. “In 2025, the reshuffling effects driven by the shift towards localisation of the semiconductor industry chain continued throughout the whole year,” the company said. Fourth-quarter revenue grew 13 per cent from a year earlier to US$2.49 billion, beating an analyst estimate of US$2.42 billion. Profit attributable to shareholders jumped 61 per cent to US$172.9 million, but missed the estimate of US$183.3 million. Likewise, full-year 2025 revenue beat the analyst estimate of US$9.28 billion, but profit fell short of the expected US$706.5 million. Surging demand for chips used in AI computing pushed global semiconductor sales to a record US$791.7 billion in 2025, an increase of 25.6 per cent compared to 2024, according to the latest data released by the Washington-based Semiconductor Industry Association. For 2026, global sales are projected to reach US$1 trillion, it added. Major chipmakers are working to expand production capacity to meet the immense demand for AI-related chips. Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, delivered an upbeat outlook when releasing its fourth-quarter results in January, reassuring investors about the sustainability of AI spending. Its quarterly revenue increased 20.5 per cent from a year earlier to NT$1.05 trillion (US$33 billion), while net income increased 35 per cent year on year.</div>

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<p>China’s largest contract chipmaker, SMIC, anticipates flat revenue for Q1 due to a decline in low-end orders, despite a surge in AI chip demand. In 2025, revenue rose 16.2% to $9.3 billion, with net profit up 39% to $685.1 million. However, profits fell short of analyst expectations, leading to a 3% drop in Hong Kong shares. SMIC's co-CEO noted that strong AI demand has squeezed orders from lower-end product vendors. The company is positioned to address market demands and drive revenue growth in 2026, amid a global semiconductor supply crunch.</p>

China’s SMIC expects flat revenue as drop in low-end orders offsets AI growth