SMIC warns of margin pressure despite strong demand for chips
SMIC warns of margin pressure as it expands capacity to meet demand. The chipmaker expects a 30% jump in depreciation costs despite record revenue growth.
Insights:
Semiconductor Manufacturing International Corporation has announced a major capacity expansion to meet strong chip demand, a move expected to cause a 30% jump in depreciation costs this year. This significant increase in costs is projected to put pressure on the company’s gross profit margins. By the end of 2026, the company plans to add approximately 40,000 12-inch equivalent wafers in new monthly capacity.
