Semiconductor Manufacturing International Corporation, China’s largest contract chipmaker, is raising prices and considering fresh capacity expansion after demand for mature-node chips used alongside artificial intelligence processors surged well beyond its earlier forecasts.
The company said customer orders had increased significantly compared with projections made earlier this year, driven by a global AI infrastructure boom that is now triggering shortages across AI-related components. Management indicated it is actively evaluating adding equipment to its factories to meet the stronger-than-expected orders.
Shares in SMIC climbed following the release of its second-quarter results, which beat expectations and lifted sentiment across the broader chipmaking sector. The upbeat report reinforced the view that the AI hardware cycle is spilling beyond leading-edge processors into the mature-node segment that supports data-center and infrastructure buildouts.
Mature-node chips, produced on older and less advanced manufacturing processes, are essential companions to cutting-edge AI accelerators. They handle power management, connectivity and other supporting functions inside servers, meaning surging demand for AI processors translates directly into higher orders for the components SMIC specializes in.
The price increases mark a notable shift for a company that has faced pricing pressure and softer results in recent quarters. Earlier this year, the chipmaker’s first-quarter earnings fell short of estimates as it navigated production challenges and weaker margins.
The turnaround underscores how the AI spending wave is reshaping demand across the semiconductor supply chain. Global technology firms are pouring capital into data centers and AI computing, straining supply of everything from advanced accelerators to the supporting silicon that surrounds them.
SMIC operates under significant constraints, having been placed on a U.S. trade restriction list that limits its access to the most advanced chipmaking equipment. Those curbs have pushed the company to focus on mature-node production, a segment where it now appears well positioned to benefit from the AI-driven surge.
The developments come as chip demand fuels gains across Asian technology stocks, with manufacturers reporting stronger orders tied to AI infrastructure. Analysts have pointed to broadening momentum across the sector as the buildout accelerates.
Any decision to add equipment would require substantial investment and time to bring new capacity online. The company has not detailed the scale or timeline of a potential expansion, and how quickly it can respond may shape its ability to capture the current wave of demand as AI infrastructure spending continues to climb.