SMIC

What SMIC does

Semiconductor Manufacturing International Corporation (SMIC) is a foundry, a company that manufactures chips designed by other firms. It is headquartered in Shanghai and runs fabrication plants in Shanghai, Beijing, Tianjin and Shenzhen that process 8-inch and 12-inch silicon wafers, according to its company profile. Its shares trade in Hong Kong and on Shanghai's STAR Market.

In its 2025 annual results, SMIC reported revenue of $9,327 million, up 16.2%, and profit attributable to owners of $685 million, up 39.0%. It described itself as the world's second-largest pure-play foundry. The results noted that 2025 was the 25th anniversary of its founding.

The company's fourth-quarter report gave these figures:

• capital expenditure for 2025: $8.1 billion
• monthly capacity by year-end: 1.059 million 8-inch equivalent wafers
• utilization for the year: 93.5%

Why it matters

SMIC is China's largest contract chipmaker. According to Reuters, it is the only foundry in China that can produce logic chips, including CPUs and GPUs, in volume on a 7-nanometer process. Nanometer figures label generations of manufacturing technology. Smaller numbers are generally more advanced. In 2023 Huawei's Mate 60 phones used a 7-nanometer chip produced by SMIC, Reuters reported.

The United States restricts what SMIC can buy. A Commerce Department rule effective December 18, 2020 placed SMIC and ten related entities on the Entity List. The rule gives two reasons: China's military-civil fusion doctrine and what the department called evidence of dealings between SMIC and entities of concern in China's military sector. License requests for items uniquely required to make chips at 10 nanometers or below face a presumption of denial. SMIC has denied having ties to the Chinese military-industrial complex, according to Reuters.

Recent developments

SMIC reported second-quarter 2026 revenue of $3,005.6 million, up 20% from the first quarter, with a gross margin of 25.3%. Reuters reported that:

• quarterly revenue topped $3 billion for the first time on strong AI demand
• China accounted for 90% of it
• co-CEO Zhao Haijun said SMIC had raised prices

Monthly capacity was about 1.1 million 8-inch equivalent wafers and utilization was 93.7%, Reuters said. In May 2026 Zhao said overseas customers were shifting orders to China as AI demand tightened capacity at foreign foundries.

SMIC also came under new political pressure in 2026. On March 26 two senior US officials told Reuters that SMIC had sent chipmaking tools to Iran's military. The officials did not say whether the tools were of US origin. SMIC did not immediately respond to a request for comment. Reuters noted that China's government describes its trade with Iran as ordinary commerce. On April 2 US lawmakers introduced the MATCH Act. The bill would block sales and servicing of key lithography equipment to SMIC and other Chinese chipmakers. A narrower version seen by Reuters later that month still covered certain SMIC facilities. In June 2025 Taiwan added SMIC to its own export control list.

What to watch

• Third-quarter 2026 results, measured against SMIC's guidance of 2% to 4% sequential revenue growth and a gross margin of 26% to 28%.
• Whether the MATCH Act or other new US controls become law. The bill was still being revised in the US House in April 2026, according to Reuters.
• Supply of advanced chips for Huawei. Reuters reported in October 2026 that SMIC is widely believed to make Huawei's Kirin and Ascend chips. It said Huawei did not name its manufacturer and SMIC did not respond to a request for comment.
• Capital spending, which SMIC said in February 2026 it expected to be roughly flat with 2025.