SMIC: AI Computing Power in Short Supply; Semiconductor Foundry Capacity to Be Extremely Tight in 2027

At SMIC’s Q3 2026 earnings call, Co-CEO Zhao Haijun stated that AI development is “still in full swing,” with computing power demand significantly outstripping supply. The current industry consensus is that 2027 will be a year of extremely tight capacity, a situation expected to persist until mid-to-late 2028. After mid-2028, AI-related memory demand may reach a basic supply-demand balance, while computing power and other supporting chips could remain in short supply.

In terms of wafer revenue by segment, demand for mobile phones and mid-to-low-end consumer products is weakening and may continue to decline in the future. Despite the traditional off-season, SMIC’s performance remained resilient. Although orders for mobile phones and certain consumer products softened, the company fully leveraged its multi-process platform coordination capabilities, redirecting freed-up capacity toward high-demand, high-value-added products such as specialized memory and BCD chips.