How SMIC engineered record second-quarter financial resultsCo-Chief Executive Officer Zhao Haijun told equity analysts during the August earnings presentation that pricing negotiations concluded earlier in the year yielded an immediate 5.7 per cent sequential increase in average selling prices. Total wafer shipments climbed 14 per cent during the same interval. The operational surge occurred while the company expanded its overall production envelope by 1.7 per cent, adding 8,000 twelve-inch wafers in monthly output.Financial and Operational MetricQ2 2026 Reported ValueSequential ChangeTotal RevenueExceeded $3.00 billionUpward trajectoryNet Profit Attributable to Shareholders$479.2 millionRoughly tripled year on yearAverage Selling Price (ASP)Baseline indexUp 5.7 per centTotal Wafer Volume ShippedHigh-volume runUp 14.0 per centAverage Monthly Run-Rate (8-inch equivalent)1.1 million wafersUp 1.7 per centFactory Utilisation Rate93.7 per centElevated loadNew 12-inch Monthly Capacity Added8,000 wafersQuarterly additionH1 Capital Expenditure$3.40 billionIncremental gainAnnualised Full-Year Depreciation Burden$5.00 billion projectedUp 30.0 per centQ3 Revenue Guidance WindowTarget guidanceUp 2.0 to 4.0 per centThe firm committed $3.4 billion to capital expenditure across the initial six months of the calendar year to sustain hardware acquisitions and cleanroom installations. First-half equipment amortisation reached $2.3 billion, creating an expected full-year depreciation charge approaching $5 billion. That figure represents a 30 per cent annual increase in balance-sheet asset write-downs.Why domestic artificial intelligence demand drives foundry pricingChinese enterprise customers generated 90 per cent of total quarterly revenue, while North American buyers accounted for 8 per cent. Tightened Western technology trade controls pushed Chinese system designers toward domestic supply chains for accelerator hardware. SMIC remains the solitary domestic facility processing merchant logic circuits on 7-nanometre process nodes.Zhao confirmed that the firm plans additional contract price increases across wafer runs scheduled for delivery in the third quarter. Management projected revenue expansion of 2 to 4 per cent for the three months ending September. The pricing shift reflects calculated market positioning, closing historical valuation discounts against larger offshore competitors while domestic customers lack practical alternative fabricators.