🧠 Food for thought

Implications, context, and why it matters.

High demand and supply-chain localisation are keeping SMIC’s factories running near full capacity

• Quarterly revenue rose as factory utilization hit 95.7% 1.
• Demand tracks a “localization shift” in China’s semiconductor supply chain, as domestic chip designers choose local manufacturing to keep supply steady 1.
• The pattern grew through the year, with mainland China making up 86% of SMIC’s third-quarter sales by geography 2.
• On an earnings call, SMIC co-CEO Zhao Haijun said supply still trails demand 2.

SMIC is positioning for above-peer growth amid US curbs and China’s capacity expansion

• SMIC’s latest numbers tie to China’s drive for a more self-reliant semiconductor ecosystem under US technology restrictions 2.
• SMIC said benefits from the “reshoring of the industrial chain” sit alongside pressure from a major cycle in the memory sector. It forecast first-quarter gross margin of 18% to 20% and flat quarter-over-quarter revenue 1.
• Zhao said domestic wafer foundry capacity across China will grow faster next year 2.
• SMIC expects its 2026 sales revenue growth rate to beat the average of comparable peers if the external environment stays stable. It also plans capital expenditure to stay roughly flat versus 2025 1.