SMIC co-CEO Zhao Haijun says all chipmakers will benefit from massive AI adoption.

Top Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) said it expects consumer electronics demand to recover next year, after demand for locally made chips helped push its quarterly revenue above USD 2 billion for the first time.

Co-CEO Zhao Haijun told investors on November 8 that SMIC started to see a recovery in consumer electronics in the July-September period. Increased demand for locally made chips amid US-China tensions has pushed the company’s 12-inch wafer production utilization to “almost full for the past several quarters.”

SMIC is now on track to achieve record annual revenue of USD 8 billion, which would translate to an increase of 27% and outpace the broader industry’s growth, according to Zhao.

Looking forward, Zhao said he expects a continuous recovery in 2025 but warned some price pressure could emerge as more chip plants go online next year.

“In most of the segments from mobile, tablets, computer, connectivity, to [internet of things] devices, we are all seeing a recovery. Currently, only in automotive and industrial applications are we not sure whether there is a rebound,” he said, adding that overall the company expects growth of 4–9% next year for all chips except the most cutting-edge artificial intelligence and high-performance computing ones.

The co-CEO said all chipmakers will benefit from the massive adoption of AI, despite China having limited access to cutting-edge chip technology. “It’s not only in servers but also opportunities in a lot of edge devices. Another aspect is that some chip customers cannot find enough capacity from leading chipmakers, so they come to SMIC.”

Zhao said the overall pace of chip capacity expansion in China will slow next year, as there have been fewer announcements of expansions lately. “The capacity increase this year will be at its peak. There will be a capacity increase next year, but the growth won’t be higher than this year.”

SMIC’s revenue in the July-September quarter increased 34% on the year to USD 2.171 billion. Its profit increased 58.3% to USD 148.8 million, while gross margin for the period improved to 20.5% from 19.8% the same time a year ago.

Revenue contribution from the home market increased to a record 86.4% in the July-September quarter from 80.3% the previous quarter, with the US market falling to 10.6% from 16%.

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