--- title: "Goldman Sachs: Maintains \"Buy\" Rating on SMIC with Price Target of HK$153, Bullish on AI-Driven Growth in Second Half" type: "News" locale: "en" url: "https://longbridge.com/en/news/300001933.md" description: "Goldman Sachs maintains a \"Buy\" rating on SMIC with a price target of HK$153. The firm expects revenue to increase by 12% quarter-over-quarter and 27% year-over-year in the second half of 2026, driven by the growth of generative AI in China, the trend toward localization, and capacity expansion. Goldman Sachs is optimistic about the mid-to-long-term growth potential driven by AI and notes that SMIC recorded the strongest quarter-over-quarter revenue growth among the top ten global foundries in the second quarter of 2026" datetime: "2026-09-24T08:56:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/300001933.md) - [en](https://longbridge.com/en/news/300001933.md) - [zh-HK](https://longbridge.com/zh-HK/news/300001933.md) generator: "portal-rs" --- # Goldman Sachs: Maintains "Buy" Rating on SMIC with Price Target of HK$153, Bullish on AI-Driven Growth in Second Half According to Zhitong Finance APP, Goldman Sachs released a research report maintaining a "Buy" rating on SMIC (00981), with a 12-Month Price Target of HK$153 for its H-shares. The firm remains bullish on SMIC, expecting revenue in the third and fourth quarters of 2026 to remain at the high levels seen in the second quarter of 2026. This is projected to drive a 12% quarter-over-quarter and 27% year-over-year revenue growth in the second half of 2026, primarily supported by the growth trend of generative AI in China boosting mature and advanced nodes, the rising trend of localization, and the company's continuous capacity expansion. ## **Key Points from Goldman Sachs:** **Generative AI to Drive Future Growth** Goldman Sachs stated that under optimistic, base, and pessimistic scenarios, the compound annual growth rate (CAGR) of the total potential market size for AI chips in China from 2025 to 2030 is expected to be 142%, 69%, and 6%, respectively, reaching $4.123 trillion, $678 billion, and $66 billion by 2030. To achieve the base scenario, SMIC would need to allocate 54% to 71% of its capital expenditure to 7nm and more advanced processes. The firm also expects capital expenditure by leading Chinese cloud platforms to increase by 80%, 20%, and 18% year-over-year from 2026 to 2028, respectively, raising its forecasts for the same periods by 37%, 44%, and 55%, respectively. In addition to AI chip demand in China driving advanced nodes, Goldman Sachs believes that mature processes are also supported by related AI demand, including analog ICs and power semiconductors. The capacity of global tier-1 peers is occupied by AI and leading process nodes, providing opportunities for Chinese foundries in non-AI demand or mature processes. **Strongest Quarter-over-Quarter Revenue Growth Among Top Ten Global Foundries in Q2 2026** According to TrendForce data, SMIC remained among the top three global foundries by revenue in the second quarter of 2026, with revenue increasing by 20% quarter-over-quarter. This exceeded the overall quarter-over-quarter growth rate of 11.5% for the top ten global foundries, making SMIC the company with the strongest quarter-over-quarter revenue growth among the top ten. Goldman Sachs believes this reflects strong AI demand in China and customers' efforts to diversify suppliers to better secure capacity. **Optimistic Outlook for the Second Half of 2026** Goldman Sachs expects SMIC's revenue in the third and fourth quarters of 2026 to remain at the high levels of the second quarter, with capacity utilization staying above 95% in the second half of 2026. New pricing for wafers that completed tape-out in the fourth quarter of 2025 and the first quarter of 2026 is expected to take effect in the third quarter of 2026, thereby supporting gross margins despite rising depreciation. Due to continued tight capacity for AI-related computing, logic, BCD, and optical module-related chips, the firm expects a low likelihood of a downward trend in average selling prices in the second half of 2026, and remains bullish on the support from high utilization, improved pricing, and sustained demand for AI-related applications. **Valuation and Risks** Goldman Sachs assigns a 12-Month Price Target of HK$153 for SMIC's H-shares, based on 80.7 times the forecasted P/E ratio for 2028, discounted to 2026 using a 15% cost of equity. The target valuation multiple is based on the correlation between SMIC's earnings per share (EPS) growth rate and the P/E ratios and EPS growth rates of its peers. Key risks include weaker-than-expected demand for smartphones and consumer electronics, slower-than-expected product diversification and capacity expansion, and potential restrictions on the supply of certain equipment and materials due to the company's inclusion on the U.S. Department of Commerce's Bureau of Industry and Security Entity List. ### Related Stocks - [00981.HK](https://longbridge.com/en/quote/00981.HK.md) - [688981.CN](https://longbridge.com/en/quote/688981.CN.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) - [HSMD.SG](https://longbridge.com/en/quote/HSMD.SG.md) ## Related News & Research - [SMIC files HKEX next-day disclosure return, lifts share capital by 92,340 shares](https://longbridge.com/en/news/297499675.md) - [China’s SMIC plans expansion as AI-related chip demand beats forecasts](https://longbridge.com/en/news/295893913.md) - [Microsoft, Nvidia CEOs to unveil new AI laptop at San Francisco event](https://longbridge.com/en/news/301127121.md) - [Microsoft brings more AI to PCs as it challenges Apple](https://longbridge.com/en/news/301173539.md) - [Musk says TSMC won't run Terafab AI chip complex](https://longbridge.com/en/news/301113398.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**