Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor delivered stronger-than-expected results, with both foundries surpassing their earlier guidance.
The companies pointed to rising demand for peripheral chips used in artificial intelligence systems as the main force behind their performance.
These components support the wider AI hardware ecosystem, even though they are not the high-end processors typically associated with AI computing.
AI Hardware Demand Supports Foundry Growth
The growing deployment of AI infrastructure is increasing demand across the semiconductor supply chain.
While advanced processors attract most of the attention, AI servers and related systems also rely on a broad range of supporting chips, including power-management devices, connectivity components and other peripheral semiconductors.
That wider demand has created fresh momentum for Chinese foundries. SMIC and Hua Hong Semiconductor both identified AI-related applications as the strongest contributor to their recent performance.
Price Increases Expected to Continue
The two companies also indicated that higher chip prices are likely to remain in place. Foundries have been raising prices as demand improves and production capacity remains under pressure in several chip categories.
Continued price increases could help support revenue growth, although they may also raise costs for customers across the electronics industry.
Manufacturers of servers, consumer devices and industrial equipment could face additional pressure if elevated pricing extends into upcoming quarters.
AI’s Growing Stature in Advanced Processors
The results highlight how AI is influencing more than just the market for advanced processors. Demand is spreading to the supporting chips required to power, connect and manage AI-enabled systems.
For Chinese foundries, this shift offers an opportunity to strengthen growth in segments beyond leading-edge manufacturing.
If demand for AI-related peripheral chips remains firm, SMIC and Hua Hong Semiconductor could continue to benefit from improving orders and firmer pricing.
