SMIC: Memory and BCD supplies are in short supply, causing prices to rise.

SMIC International released an announcement of the record of investor relations activities, stating that looking forward to 2026, the effects of the offshore return of the industrial chain and the replacement of overseas old products by domestic customers will continue, bringing continuous growth space to the domestic industrial chain. At the performance briefing in November, it was mentioned that the storage cycle has an impact on the industry and wafer foundry industry. In the past two months, we have communicated extensively with industry chain partners and observed that the strong demand for storage in artificial intelligence has squeezed the supply of storage chips that can be obtained by mobile phones and other applications, especially in the middle and low-end fields, putting pressure on end manufacturers to face insufficient supply and price increases for storage chips. Even if end manufacturers can absorb the pressure of rising costs through price increases, it will also lead to a decline in demand for end products. In this market environment, the company, relying on its technological reserves and leading advantages in BCD, analog, storage, MCU, and middle to high-end display driver segments, as well as its customer product layout, can still maintain a favorable position in this round of industry development cycle. The company will actively respond to the urgent market demand and drive revenue growth in 2026. Price is a matter of supply and demand. SMIC International's storage, BCD are in short supply and prices are rising. Some mature capacity of friendly competitors has been shut down, and the supply in the market is decreasing. We have seen that prices of CIS and LCD driver in some major categories have stabilized, while prices of new, iterative, and competitive products have increased. Products with fast iterations, such as Wifi, LCD driver, AMOLED driver, have rising prices; non-iterative standard products will see a slight decrease in prices. The company will prioritize support for iterative products in terms of research and development, engineering, and capacity, solidify product prices, and improve control over ASP.