On August 27th, SMIC released its 2026 interim report, which showed impressive business data for the first half of the year.

During the reporting period, the company achieved a revenue of 38.635 billion yuan, a year-on-year increase of 19.4%; The net profit attributable to the parent company was 4.467 billion yuan, a year-on-year increase of 94.2%; Deducting non recurring net profit of 2.994 billion yuan, a year-on-year increase of 57.2%.

The cash flow performance was particularly outstanding, with a net cash inflow from operating activities of 20.76 billion yuan, a year-on-year increase of 252%, and a gross profit margin of 23.2%, an increase of 1.3 percentage points compared to the same period last year.

Simply put, selling chips and wafers not only earns more money, but also results in more real gold and silver in one's hands. Revenue has increased by nearly 20%, and net profit has nearly doubled - the growth rate of net profit is close to five times the growth rate of revenue, which is not common in the financial report history of SMIC. You should know that its net profit margin has been hovering in single digits for the past two years, but now it has finally made it through. 

The significant increase in performance mainly comes from three aspects: the rise in wafer shipments, the increase in average product prices, and changes in product structure.

Nowadays, the demand for AI supporting chips is hot, and many overseas orders are also flowing back. The demand for localized manufacturing in China is becoming stronger, and there are plenty of orders on hand for production. For some products that are in short supply, companies and customers negotiate to raise prices, and the benefits brought by the price increase are gradually reflected.

In terms of business revenue, wafer foundry business contributed 35.858 billion yuan, accounting for the absolute majority. From the perspective of customer regions, the proportion of domestic revenue has reached 89.6%, a significant increase compared to last year.

In downstream applications, consumer electronics account for 45.1%, smartphones account for 17.8%, and industrial and automotive chips account for 15.4%.

In terms of research and development, 2.725 billion yuan was invested in the first half of the year, accounting for 7.1% of the total revenue. By the end of June, a total of 14784 patents had been authorized, including 12891 invention patents.

For the market in the second half of the year, the company is optimistic and believes that the industry dividends brought by AI will continue to drive the demand for chip manufacturing.

*Disclaimer: The above content is reproduced on the WeChat official account of the semiconductor industry circle, which does not represent the views and positions of the company, but only for exchange and learning. If you have any questions or objections, please contact us.