SMIC, Hua Hong forecast higher Q2 revenue on AI demand

SMIC and Hua Hong Semiconductor, two Chinese chip foundries, said second-quarter revenue should rise as demand tied to AI and a memory supply crunch support sales.

SMIC guiding for US$2.86 billion to US$2.91 billion from US$2.51 billion in the first quarter and Hua Hong forecasting US$690 million to US$700 million from US$661 million.

In a Hong Kong filing, SMIC said it was more optimistic about full-year operations based on customer demand and orders on hand.

Hua Hong chairman Bai Peng said the company saw no impact from US export controls on equipment purchases for Fab 9B in Jiangsu.

He hoped meetings between Xi Jinping and Donald Trump could help ease the restrictions.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

US export controls reshape China’s chip sector

Hua Hong’s chairman said US export controls had not affected equipment purchases for Fab 9B in Jiangsu. Even so, the US Commerce Department ordered several US chip equipment companies to stop some shipments of tools and materials to Hua Hong-linked sites 1, 2.
The order covers two Hua Hong facilities that US officials believe could help make more advanced chips. Huali Microelectronics, a Hua Hong unit, was preparing a 7-nanometer production process at a Shanghai site 3.
US curbs have lifted domestic chip demand, speeding China’s effort to expand its own chip industry. Local foundries such as SMIC have reached record revenue 4.
Chinese equipment suppliers Naura and AMEC also posted record revenue in 2025, as local foundries bought more domestic tools under US export controls 5.

AI demand tightens mature-node chip supply

AI demand is lifting foundry growth for mature-node chips, or older manufacturing processes, as well as leading-edge processors 6.
AI data centers are moving toward high-voltage direct current (HVDC) power architectures, which raises demand for high-voltage power components. Larger chip sizes also reduce output from each 8-inch wafer, said TrendForce, a market research firm 6.
SMIC, Hua Hong, and other leading Chinese foundries are running at full capacity. Prices for some processes have already risen about 10%, said TrendForce 6.
Chip packaging and testing providers have sought price increases since February or March. Leading outsourced semiconductor assembly and test (OSAT) companies such as ASE are raising prices by as much as 20% this quarter. TrendForce also warned that longer growth in mature-node demand could lead to overcapacity 4, 6.