SMIC says AI chip supply chain will stay tight through 2027

BEIJING, Nov 13 — China's biggest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), said on Friday that the artificial intelligence industry is still in its early stages and demand remains strong, with many customers that need computing resources still facing shortages. The semiconductor supply chain for AI-related applications will stay tight through 2027 on demand from data centres and private clouds, co-chief executive Zhao Haijun told analysts on the company's third-quarter earnings call.

Answering the AI bubble question

Zhao was responding to a question about whether AI stocks were forming a bubble. He said the AI industry was still early and demand remained strong. The remarks from China's largest foundry are watched as a gauge of industry demand, as markets debate whether AI spending can keep growing.

Memory balance not until 2028

Zhao added that memory chip supply and demand should reach balance only toward the middle to end of 2028, suggesting tightness in memory will persist for some time. The company also faces longer lead times for equipment, with some orders taking more than 24 months to deliver, which would affect its capital spending this year. SMIC's depreciation expense will rise about 30% year on year in 2026, Zhao said.

(Sources: Reuters; ChainCatcher.)