SMIC sees strong demand offsetting U.S. tariff concerns

August 08, 2025 (MLN): Semiconductor Manufacturing International Corp (SMIC) expects strong domestic demand to keep its production capacity tight until October, with co-CEO Zhao Haijun noting that U.S. tariff policies have not caused the “hard landing” the company initially feared.

Speaking during a post-earnings call on Friday, Zhao said SMIC is not holding consultations with customers over U.S. President Donald Trump’s proposed 100% tariff on semiconductor imports, as contingency measures introduced after tariffs were announced in April are expected to limit the impact.

Earlier this year, Trump raised tariffs on Chinese goods to 145%, prompting China to impose additional duties of 125% on U.S. products.

The planned 100% tariff will not apply to firms manufacturing in the U.S. or those committed to do so, as CNBC reported.

Zhao highlighted that previous tariff rounds resulted in less than a 10% cost increase for overseas customers.

“After these past few months, everyone has either stocked up enough inventory for this year and next year, or found other suppliers,” he said.

“So I think the impact will become even smaller.”

China remains SMIC’s largest market, contributing 84% of its second-quarter revenue, unchanged from the first quarter.

The U.S. accounted for 12.9%, up slightly from 12.6%.

In the second quarter, SMIC posted revenue of $2.2 billion, up 16.2% year-on-year.

However, profit attributable to owners fell 19.5% to $132.5 million, missing analysts’ expectations of $183.35m, according to LSEG data.

Shares traded in Hong Kong were down over 5% on Friday.

SMIC was placed on the U.S. Commerce Department’s blacklist in 2020.

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