[News] SMIC Sees Capacity Tightness Through 2027, Possibly into 2H28; Equipment Lead Times Stretch to 16–24 Months

What happened

Reported on 2026-11-13, SMIC co-CEO Zhao Haijun said the industry broadly expects capacity to remain severely constrained throughout 2027, with shortages likely extending into mid-to-late 2028 (2H28); AI-related memory supply and demand could reach a rough balance after mid-2028, while computing chips and other supporting semiconductors may remain in short supply. Citing Calian Press, Zhao warned that tight global chipmaking equipment supplies, longer lead times and uncertain delivery schedules could disrupt SMIC's full-year spending plans, although its 2026 capacity expansion remains on track; surging industry demand, compounded by panic buying, has stretched equipment delivery times, affecting machinery SMIC had expected to receive this year, and suppliers are now quoting lead times of 16–24 months for new equipment orders. Financial results: third-quarter profit soared 123.4% to $428.4 million while revenue surged 33.9% YoY to $3.19 billion; Q3 utilization climbed to 97.3% from 93.7% in the previous quarter and gross margin improved to 29.9%; SMIC expects gross margin to retreat to 26–28% in Q4 even as revenue is projected to grow 4–6% QoQ, with shipments steady and market-driven price adjustments plus a more favorable product mix lifting ASPs, while rising depreciation and raw material costs and increased engineering and R&D wafer starts weigh on profitability and utilization edges lower despite continued capacity expansion. For full-year 2026, Zhao expects revenue to exceed $12 billion, up nearly 30% YoY, with gross margin projected at around 26%, an improvement of approximately 5 percentage points from 2025. Reuters noted China contributed 90.8% of quarterly revenue, up slightly QoQ, while the U.S. share edged down to 7.8% from 8.2%. With capacity struggling to keep pace with demand, SMIC said it would adjust pricing in line with industry trends, prioritize the most capacity-constrained segments, and negotiate price increases with customers.

Impact and signal

Affected components and suppliers

Source and time

Source: TrendForce · 11/12/2026 · View original source