SMIC stock: Q3 revenue beats forecast on AI demand

Semiconductor Manufacturing International Corporation reported stronger third-quarter operations in a report published by Investing.com on Friday, November 13. The quarter ended September 30, and management said demand for AI-related chips, specialty memory and industrial products helped lift sales and profitability.

Revenue reached 3.19 billion US dollars, up 6.1 percent from the second quarter and above the 3.11 billion US dollar analyst forecast cited in the report. Earnings per share came in at 0.05 US dollars, slightly below the 0.0513 US dollar estimate. Profit attributable to SMIC was about 428 million US dollars.

AI demand supports capacity utilization

Gross margin rose to 29.9 percent from 25.3 percent in the preceding quarter and exceeded the company guidance range of 26 percent to 28 percent. Factory utilization increased to 97.3 percent, while eight-inch-equivalent wafer shipments surpassed three million units for the first time, according to the report.

Co-Chief Executive Zhao Haijun said customer demand for chips supporting AI infrastructure remained strong and supply constrained. The company also pointed to specialty memory, BCD power-management products and controller chips as areas benefiting from customer demand. Smartphone and some lower-end consumer orders remained weaker, while industrial and automotive demand improved.

Fourth-quarter guidance stays positive

SMIC expects fourth-quarter revenue to rise 4 percent to 6 percent sequentially. Gross margin is forecast at 26 percent to 28 percent as seasonal factors, depreciation, raw-material costs and additional engineering and research wafer runs weigh on profitability. Management expects full-year revenue to exceed 12 billion US dollars, with annual gross margin around 26 percent.

For investors, the results highlight the importance of utilization, product mix and capacity expansion. Equipment lead times remain extended, which could affect the timing of capital spending even as the company continues adding capacity. The outlook therefore combines firm AI-linked demand with execution and cost risks.

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