China’s biggest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), says the AI industry is still in its early stages. Demand remains strong, the company said on Friday, Reuters reported. Co-CEO Zhao Haijun made the comment when asked whether AI was forming a bubble.
Shortages and supply outlook
Many customers that need computing resources still face shortages, Zhao said. He expects the supply chain for AI applications to stay tight through 2027. Data centres and private clouds are driving that demand.
Memory chip supply and demand should reach balance toward the middle to end of 2028, he said.
SMIC’s own outlook
SMIC expects full-year revenue to exceed $1.2 billion as its capacity utilisation keeps rising. The company faces longer lead times for equipment. Some orders take more than 24 months to arrive. This will affect its capital spending this year. Zhao said SMIC’s depreciation expense will rise about 30% year on year in 2026
