AIBRIEF
China's largest contract chipmaker confirmed price hikes on supply constrained product lines in its Q1 2026 call, joining TSMC and Samsung in signaling AI driven pricing power.
SMIC, China's largest contract chipmaker, told investors on its Thursday Q1 2026 earnings call that it has raised prices on product lines facing supply shortages and that there is "no chance" the company will lower them, joining TSMC and Samsung in publicly flagging that AI demand is now tightening mature-node pricing.
Co-CEO Zhao Haijun said "future wafer starts are far exceeding our previous expectations," the clearest sign yet that AI-related orders are filling capacity that was running well below utilization a year ago. SMIC negotiated the increases with customers in supply-constrained categories and said Q3 2026 wafers will carry an additional premium. The company guided Q2 gross margin to 20%-22%, up as much as 2 percentage points sequentially.
TrendForce reports that around 80% of Shenwan-classified Chinese semiconductor firms saw higher operating costs in Q1, with foundry price hikes cited as a key driver, while capacity utilization at a leading domestic foundry has nearly doubled since Q3 2025. TSMC and Samsung are pulling capacity into advanced nodes, pushing high-voltage and CIS customers onto Chinese fabs.
Orders for BCD power-management products are visible through end of 2027, with demand strongest in logic, power management, and optical modules for AI servers. Zhao named five growth drivers: AI power management, overseas AI demand, ToF sensors, EVs, and robotics.