By Sherry Qin

Semiconductor Manufacturing International Corp. is scheduled to report fourth-quarter results on Tuesday. Here's what to know:

NET PROFIT FORECAST: China's largest contract chip maker is expected to post a 30% rise in net profit to $139.5 million, according to a consensus estimate of 10 analysts polled by FactSet.

REVENUE FORECAST: Revenue is projected to have risen 9% from a year earlier to $2.41 billion, in line with SMIC's guidance for 0% to 2% sequential growth from $2.38 billion in the previous quarter.

SMIC's Hong Kong-listed shares fell 10% in the fourth quarter after the U.S. and China reached a trade truce in late October and President Trump said in December that he would allow Nvidia to export its H200 chip to China.

Widely viewed as a proxy for China's push to localize AI chip production, SMIC's shares rallied as U.S.-China trade tensions intensified and amid Beijing's broader drive for technological self-sufficiency.

With the two economies having reached a deal, easing trade tensions reduced the urgency for semiconductor substitution has also declined, said Eugene Hsiao, Macquarie Capital's head of China equity strategy.

The Chinese chip maker's stock rose 125% in 2025.

WHAT TO WATCH:

-- The chip maker guided its fourth-quarter gross margin to 18% to 20%, down from 22% in the previous quarter.

Citi analysts said the weaker outlook was likely driven by rising depreciation costs from expanding capacity and yield issues during the ramp-up of more advanced technology.

Meanwhile, SMIC's co-chief executive officer said after the third-quarter results that surging memory-chip prices could squeeze customers' budgets for non-memory components, increasing industry competition.

-- Investors will also be watching developments around U.S. government approval for Nvidia to sell H200 chips to China, which could have a broader impact on Chinese chip makers including SMIC.

In the latest twist, some within the administration in the State Department and other agencies have advocated for the tighter rules governing the sales, the Wall Street Journal reported.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

February 06, 2026 04:11 ET (09:11 GMT)

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