SMIC Posts Record Revenue as AI Demand Drives Chip Price Increases
China's largest chip foundry, SMIC, surpassed $3 billion in quarterly revenue for the first time, boosted by strong AI-related demand. The company raised prices for its most sought-after manufacturing capacity after negotiations with customers, with average selling prices rising 5.7% while wafer shipments grew 14%. SMIC noted that much of the shipment growth was driven by AI demand for chips beyond CPUs and GPUs, particularly from Chinese customers. The trend highlights how the AI boom is creating significant pressure on physical semiconductor supply chains, not just software. Expanding foundry capacity to meet demand remains a slow and costly process, with new fabrication plants requiring billions of dollars and years to build.
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