Shares of the two major wafer foundry companies rallied in early trading on Thursday, with SMIC (00981) rising 7.06% to HK$75.80 and HUA HONG GRACE (01347) climbing 7.99% to HK$140.50.

The surge follows the simultaneous release of their second-quarter results on Wednesday evening. SMIC reported quarterly revenue exceeding $3 billion for the first time, up 20% quarter-over-quarter and 36.1% year-over-year. Its gross margin reached 25.3%, surpassing the guidance provided in its first-quarter report.

Meanwhile, HUA HONG GRACE posted record-high second-quarter revenue, with sales revenue reaching $717.5 million, a 26.8% year-over-year increase. Net profit attributable to shareholders was $38.639 million, surging 385.9% from a year ago, while gross margin rose 5.6 percentage points year-over-year to 16.5%.

According to TrendForce forecasts, the global wafer foundry market is expected to grow 24.8% year-over-year in 2026, reaching approximately $218.8 billion. The industry is likely to maintain its growth momentum in the third quarter, supported by sustained demand for AI chips and the onset of the traditional peak season for consumer electronics, which could further unlock demand for mature process nodes.