China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), said U.S. tariffs have not caused the “hard landing” it once feared, with robust domestic demand keeping capacity tight through October. Co-CEO Zhao Haijun noted that contingency plans rolled out after April’s tariff hike helped limit the damage, as customers either built up inventories or turned to alternative suppliers.
In the second quarter, SMIC’s revenue grew 16.2% year-on-year to $2.2 billion, but net profit fell 19.5% to $132.5 million, missing market expectations. Mainland China accounted for 84% of sales, while the U.S. contributed 12.9%. The company shipped 2.4 million wafers with a capacity utilization rate of 92.5%, and it expects third-quarter revenue to rise by another 5%–7%. Despite this, SMIC’s Hong Kong-listed shares fell more than 5% amid weaker sentiment.