Zhao Haijun, the co-CEO of Semiconductor Manufacturing International Corp. (SMIC), addressed investors and reporters on Wednesday, revealing a significant uptick in orders for the first two quarters of 2025. As China's largest chipmaker, SMIC has experienced an unprecedented rush in client orders, driven by the need to stockpile inventory. This surge stems from growing apprehensions about U.S. tariffs and broader geopolitical tensions, prompting clients to expedite delivery schedules initially planned for later in the year.
The ongoing geopolitical climate has led to heightened caution among SMIC's clientele, who are looking to secure their supply chains amidst potential disruptions. Zhao noted that while this influx of orders bodes well for SMIC's short-term financial performance, it also presents a looming risk. The company warns of a potential "hangover effect" that may impact financial results in the latter half of the year, as stockpiling efforts could lead to reduced demand later.
SMIC's proactive stance involves advising investors to maintain a cautious outlook despite the current increase in business activities. The company emphasizes that while the rush in orders is beneficial now, the long-term implications could affect its financial health. As clients move up delivery timelines due to tariff fears, SMIC remains vigilant about potential market dynamics shifts.
Clients' concerns over tariffs and geopolitical uncertainties have undoubtedly influenced SMIC's order books. The accelerated inventory buildup reflects an industry-wide response to mitigate risks associated with potential U.S. trade policies. Zhao's statement serves as both a reflection of market realities and a cautionary note to stakeholders.
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