Why is Semiconductor Manufacturing International stock surging today?

Semiconductor Manufacturing International Corp stock surged 6.6% to trade at HK$51.95 after China’s biggest chipmaker posted a standout set of third-quarter results.

SMIC reported Q3 revenue of $3.19 billion, rising 33.9% year-over-year, while net profit attributable to shareholders jumped 123.4% year-over-year to $428 million and gross margin expanded to 29.9% — up 4.6 percentage points from the prior quarter and comfortably above the company’s own guided range of 26% to 28% — as plant utilization climbed to 97.3%.

Adding further fuel to today’s rally, co-CEO Zhao Haijun stated that the company expects full-year 2026 revenue to exceed $12 billion, representing growth of nearly 30% from the prior year, with the full-year gross margin projected around 26% — approximately 5 percentage points higher than a year ago.

Management attributed the strong demand environment to AI-related chips, specialty memory, and industrial customers, and noted that supply remains tight. The Q4 revenue growth guidance of 4%–6% sequentially was well-received, though the projected margin step-down to 26%–28% provided a modest offset to enthusiasm.

Sector-level tailwinds also contributed to the move. Peer foundry Hua Hong Semiconductor advanced alongside SMIC, with the broader Chinese chip space buoyed by reports of foundry pricing increases from Powerchip and TSMC’s confirmation of wafer price hikes beginning in January 2027.

The Nvidia leadership crisis, stemming from reports of its board preparing to remove CEO Jensen Huang, raised market expectations of tighter U.S. chip access, which analysts noted could benefit domestic Chinese foundries like SMIC as a substitute supplier.