SMIC says AI demand will make chip-foundry capacity "very tight" in 2027 as full-year revenue tops $12 billion

Many people remember the last chip shortage, around 2021, when carmakers idled factories and graphics cards were nearly impossible to buy. Now one of China's largest contract chipmakers is pointing to the next crunch, and it says the driver this time is AI.

According to a report published by Chinese tech site IT之家 (IT Home) at 10:21 Beijing time on Nov. 13, 2026 (9:21 PM EST on Nov. 12), SMIC co-CEO Zhao Haijun said on the company's third-quarter earnings call that AI development is still in its early, fast-growing phase and that demand for computing power exceeds supply. He said the industry consensus is that 2027 will be a year of very tight manufacturing capacity, likely lasting until mid-to-late 2028. After mid-2028, he said, AI-related memory might reach a rough balance of supply and demand, while AI compute chips and supporting chips could remain short. This is management's outlook for the industry, not something that has already happened.

The numbers behind it: according to an IT Home report published at 9:05 Beijing time on Nov. 13 (8:05 PM EST on Nov. 12), SMIC's report released on Nov. 12 showed third-quarter 2026 revenue of 21.98 billion yuan (about $3 billion), up 28.1% from a year earlier, and net profit attributable to shareholders of 2.847 billion yuan, up 87.6%. For the first nine months, revenue was 60.62 billion yuan, up 22.4%, and net profit was 7.314 billion yuan, up 91.6%. Zhao said full-year revenue is expected to exceed $12 billion, up nearly 30% from last year, and that full-year gross margin should be about 26%, roughly 5 percentage points higher, even though total depreciation rose about 30%. For the fourth quarter, SMIC guided revenue up 4% to 6% from the third quarter, with gross margin of 26% to 28%.

Not everything is booming. Zhao acknowledged that demand for smartphones and mid- to low-end consumer products is weakening and may keep falling. SMIC is shifting the capacity freed up by those orders to higher-value products such as specialty memory and BCD chips. BCD is a manufacturing process that combines analog, digital and high-voltage power circuits on one chip and is widely used in power-management chips. There is also an upstream risk: he said the global chip-equipment supply chain is tight and delivery times are getting longer. Some tool deliveries remain uncertain. That will not affect this year's expansion plans, he said, but it could disrupt how next year's capital spending is carried out.

What it means for ordinary people: AI data centers are competing hard for chips and factory capacity while demand for phones and everyday gadgets stays soft, and that split may last a while. If foundry capacity is as tight in 2027 as SMIC expects, chipmakers are likely to give priority to more profitable AI and memory-related work. That could squeeze chip costs and supply timing for some consumer electronics, and eventually show up in device prices or launch dates. Still, this is one company's read on the industry. What actually happens will depend on whether AI spending holds up and how quickly new factories and equipment come online worldwide.

Original sources published: IT之家 (IT Home, SMIC results and guidance), Nov 13, 2026, 09:05 Beijing time / Nov 12, 2026, 8:05 PM EST; IT之家 (IT Home, Zhao Haijun on 2027 capacity), Nov 13, 2026, 10:21 Beijing time / Nov 12, 2026, 9:21 PM EST