SMIC Forecasts AI Chip Shortage Through 2028 Amid US Curbs
Key Points
- Third-quarter gross profit surged 82.3 percent to $953.2 million amid strong wafer sales.
- U.S. export controls restrict advanced equipment, accelerating reliance on domestic Chinese foundries.
- Next steps involve expanding mature-node capacity to meet growing infrastructure buildout needs.
Editorial Deep Dive & Context
China’s Semiconductor Manufacturing International Corp (SMIC) warned during its earnings call that the global AI chip supply chain will remain constrained through 2028, driven by relentless data center expansion and structural production bottlenecks. Co-CEO Zhao Haijun emphasized that the artificial intelligence sector is still in its ascendant phase, with demand for computing power extending beyond centralized facilities to enterprise-level micro-data centers seeking operational efficiency.
Financially, SMIC reported an 82.3 percent year-on-year surge in third-quarter gross profit to $953.2 million, with quarterly revenue rising 33.9 percent to $3.19 billion. The company attributed these gains to higher wafer sales volumes, improved capacity utilization, and a favorable product mix.
However, geopolitical tensions complicate long-term growth; U.S. export controls restrict access to advanced chipmaking equipment, forcing SMIC to invest heavily in mature-node and packaging technologies while domestic peers like Hua Hong Semiconductor also report rising demand. The strategic significance lies in the acceleration of China’s semiconductor self-reliance. With advanced packaging capacity limited and high-bandwidth memory production dominated by few players, SMIC’s forecast highlights a critical gap between AI hardware demand and available supply.
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SMIC Forecasts AI Chip Shortage Through 2028 Amid US Curbs
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