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Ann Cao

Howard Liu

China’s leading semiconductor foundries, Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, expect their second-quarter sales to rise amid a dynamic global market defined by surging artificial intelligence demand and a memory supply crunch, while Hua Hong said it hopes this week’s Xi-Trump meetings could help relax US export controls.
SMIC expected its second-quarter revenue to range between US$2.86 billion and US$2.91 billion, up from US$2.51 billion in the first quarter. Its smaller rival Hua Hong said second-quarter revenue was likely to range between US$690 million and US$700 million, compared with US$661 million in the prior quarter.
“We are more optimistic about our full-year operations than we were last quarter, based on customer demand and orders on hand, and will remain flexible in allocating resources to ensure high-quality delivery in a complex environment,” SMIC said in a filing to the Hong Kong stock exchange on Thursday.
Separately on Thursday, Bai Peng, Hua Hong’s chairman and president, downplayed the impact of US export controls on the company’s capacity expansion plans.
Bai said the company currently “does not see any impact” from US export controls on equipment procurement for Fab 9B, its new fab in eastern Jiangsu province, which began construction in March.
Reuters reported in April that Washington had asked multiple chip equipment companies to halt certain tool shipments to Hua Hong.
“Now that President Trump is in China, we certainly hope this environment is going to be further relaxed going forward,” Bai said on the company’s earnings call.

The expectations come as the industry deals with a massive supply crunch in memory chips, as the ramp-up of advanced chips to feed demand from AI data centres eats up global wafer capacity, driving up costs across the supply chain. This has forced some companies, including smartphone makers, to scale back their production plans.
The two Chinese foundries reported first-quarter results in line with market estimates on Thursday.
For the quarter ending March 31, SMIC reported revenue of US$2.51 billion, a year-on-year increase of 11.5 per cent, in line with the consensus estimate of US$2.5 billion compiled by Bloomberg.
Net profit attributable to shareholders was US$197 million compared with US$188 million in the same period last year. The company’s gross margins contracted to 20.1 per cent, compared to 22.5 per cent a year ago.
Hua Hong revenues reached US$660.9 million in the first quarter, up 22.2 per cent from a year earlier, compared with the consensus estimate of US$659.9 million. Revenue growth was primarily driven by increased wafer shipments and improved average selling price, the company said.
Net profit attributable to shareholders was US$20.9 million, compared to a profit of US$3.8 million in the first quarter of 2025.
“Despite the rapid capacity ramp-up, the company maintained high capacity utilisation rates, with strong performance across all process technology platforms,” said Bai, adding that microcontroller units (MCUs), stand-alone flash, and bipolar-CMOS-DMOS (BCD) products had delivered the highest growth rates.
Bai said the memory supply crunch was extending from DRAM and NAND to NOR flash – a type of flash memory where cells are arranged horizontally in a semiconductor – and he expected a price hike of 10 to 15 per cent for NOR flash this year. “We do get the benefit of higher prices,” he added.
Analysts expected the domestic foundries, which primarily focus on the fabrication of analogue and logic chips, to continue to benefit from increasing demand for AI data centres.

AI computing power investment was gradually shifting from “phased construction to long-term infrastructure development”, with sectors like graphics processing units, high bandwidth memory, high-speed switch chips, power management and advanced packaging expected to benefit, Liu Menglin, an analyst with Dongguan Securities, said in a research note this week.
The industry has been stepping up consolidation amid the changing market environment. On Monday, SMIC received regulatory approval for its acquisition of subsidiary Semiconductor Manufacturing North China (Beijing) Corp, in a deal dubbed the largest merger and acquisition in China’s chip foundry sector.
Hong Kong-listed shares of SMIC fell 3.57 per cent on Thursday to HK$71.50, while Hua Hong dropped 2.2 per cent to HK$127.


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Bai Peng, Hua Hong’s chairman and president, downplayed the impact of US export controls on the company’s capacity expansion plans


Bai Peng, Hua Hong’s chairman and president, downplayed the impact of US export controls on the company’s capacity expansion plans.


Semiconductor Manufacturing International Corporation (SMIC)

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Chinese foundries SMIC, Hua Hong forecast second-quarter growth amid AI boom

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Bai Peng, Hua Hong’s chairman and president, downplayed the impact of US export controls on the company’s capacity expansion plans

Bai Peng, Hua Hong’s chairman and president, downplayed the impact of US export controls on the company’s capacity expansion plans